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REO Foreclosures in Frisco Texas
Frequently Asked Questions
Q: What is an REO?
A: An REO “Real Estate Owned” property is a house that
has already gone through the legal process of foreclosure and the bank has taken
control of it.
Q: How do I buy an REO?
A: Buying an REO is much like purchasing any other
house. You can pick from the available foreclosure listings and through your
real estate agent, make an offer to the bank. When a deal is agreed upon by both
parties, inspections are down, financing is arranged and deed is transferred to
the buyer at closing.
Q: How much can I save on a Bank Foreclosure?
A: The savings vary from house to house. There are
many factors that determine price. One would be the DOM “days on market”. The
longer the property stays on the market, the more anxious the bank gets to sell
it. Another consideration is the amount of money owed on the house when it was
foreclosed on. It’s usually all about the bottom line. A third influence that
affects the selling prices is condition, this usually coincides with how many days
the house has been on the market. The listing agent will notify the bank of what
condition the house is in when it goes into the system. If the bank ignores this
information, the initial list price will be too high and the house will not
sell. Subsequently, after a month or two, and a reevaluation by the seller, the
price will drop. I look for properties that will sell for at least ten percent
below market value, so a $300,000 house should sell below $270,000.
Q: Do all foreclosures have value?
A: No, we need to do a comparative market analysis and
compare that to the listed price to determine if there will be savings. Some
foreclosures are listed at, and sometimes above what they are really worth.
Q: Can I have an inspection done on the house?
A: Yes, since the bank who owners the property has no
idea what actual condition the house is in and, they are not required by law to
provide a sellers disclosure to the buyer, generally a seven to ten day period
is allowed to do inspections. However, some bank do not give an unrestricted
right to terminate the contract, which means, if during the inspection a defect
was found, the bank may have the right to fix the problem and continue on to
closing.
Q: How do I finance an REO?
A: The process is
similar to buying any other house, but there are a couple of things to keep in
mind. Prequalification letters are a must with every foreclosure. If you do not
have this or proof of funds, the offer will never be considered. Most banks
selling REO’s will not allow repairs to be made to the property before closing,
and that may prevent your lender form funding. If there are structural issues or
the house is in need of extensive repair, your finance company will probably
want the house fixed before closing. In rare cases this can be worked out with
the seller to allow the sale to go through.
Q: Do all foreclosed propertied need repair?
A: No, some
houses are in move in condition with no repairs needed. With the majority of showings, the homes are in good condition
maybe needing some interior paint and possibly a carpet cleaning or replacement.
Usually, the higher priced houses are in the best shape. There are the few that
were not taken care of by the previous owners and usually the price will reflect
this or it can be adjusted in the offer.
Q: Will the seller pay for my closing costs?
A: Yes, when making an offer, seller contributions
can be added to the contract lowering the amount you would have to bring to
closing. Not all banks will offer this but many will.
Q: How long does it take to buy a foreclosure?
A: From the date of an executed contract to closing,
the time is about the same as a normal closing, about 30 days; the only process
that may take longer is the negotiation stage. Since the loss mitigation department
will usually have dozens of cases, usually hundreds to work each day, it may take up to a week
before they can look at the offer and respond to it. A note to consider, with
the all chaos in the mortgage markets today, asking for a little extra time to
obtain financing may avoid trouble later on. For every day a closing is delayed
because of any buyer problems, the seller usually charges a fee of $100 to
$300.
Q: Where do I start?
A: If you are
interested in looking at or buying a foreclosure call us 214-336-7088 or send an e-mail
jay@foreclosuresfrisco.com. We can discuss the possibilities and start right away.
Frisco
foreclosures offer a tremendous amount of value and we also service Allen,
McKinney, Prosper, Plano, Lewisville, The Colony, Sachse, Wylie, Murphy,
Richardson, Carrollton, Flower Mound, and many other areas around DFW.
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