REO & Bank-Owned Properties (FAQs)
What is an REO?
REO is an acronym for Real Estate Owned properties. They are properties that are purchased back by lenders.
What should I expect when purchasing a bank owned property?
Our bank foreclosures sell on average in 60 days or less. They are priced competitively in the market place. It is also not unusual to have more than one offer at the same time. At that time we will notify each selling agent of a possible multiple offer situation. The seller reserves the right to hear from the loan officer as to the buyers pre-qualification and credit worthiness as well as the review of buyer’s proof of funds.
What are the Earnest Money Requirements?
The typical standard earnest money to start an offer for $100,000 purchase property where the buyer is obtaining a loan is $1000.00. Normal earnest money for all cash offers is 10%. The earnest money needs to be in the form of a cashier’s check and/or wire within 2 days of binding of a purchase contract. The Seller’s local closing attorney will hold the earnest money.
What about Disclosures?
The Seller is a 3rd party that did not reside in the property; therefore, the Seller does not provide Seller Property Disclosure Form. Your Buyer should rely on his/her own inspection to determine the property’s condition. In many cases the lenders do not want a copy of the inspection. It is just for the consumer’s own knowledge. The properties are sold “As Is”, no disclosures.
My house is not not sold yet, can I make a contingency contract?
The Seller will not accept a contract if the primary home of the Buyer is not under contract. If the Buyer’s primary home is under contract, a copy of the sales contract must accompany the Buyer’s Purchase and Sale Agreement. If you are keeping your primary home and buying a second, this does not apply as long as you pre-qualify.