what is a foreclosure or reo?

A REO (Real Estate Owned) property is simply what most people refer to as a Foreclosure.  The term REO comes from an accounting term OREO which stands for Other Real Estate Owned property.  It is a "balance sheet" term that banks use to classify their non-earning assets for purposes of accounting.  What you need to know is that a REO, OREO or Foreclosure are all pretty much the same thing, which is a property that has been taken back by the bank due to lack of payment.  If you are Serious about getting the best deal possible, take a look at some Foreclosure listings below and then be sure and contact us.

forEclosure process

When a person stops making payments on their loan and decides not to try and short sale their home, the bank usually will foreclose on the property.  The bank must follow a set of legal procedures, specific timelines and notifications to foreclose on a home.  When the final trustee sale occurs, the property is usually offered for sale at a public location, typically the county court house steps.  Most people think this is the best place to purchase a foreclosure.  It’s probably NOT!  First, you must have CASH!  Not a check but CASH or Cashier's Check.  Second, you probably have had no real chance to do any due diligence or investigations on the property.  What condition is the structure, roof, plumbing, electrical, utilities....and so on?  Third, it can be very difficult to ensure a clear title.  Are there any encumbrances, liens, judgments, or easements on the property?  Since there is no official escrow process, many of your rights and abilities to investigate the property are surrendered.  As you might have guessed, this can lead to some huge issues down the road.  This is why most foreclosure properties are not sold at auction, but are just taken back by the bank.  By the bank taking the property back and then listing it on the MLS, it allows a great advantage to the buyer to purchase a Foreclosure with a contract and a REALTOR representing them.   Now, the buyer is able to enter into a legal purchase agreement with the bank that includes several buyer rights, time frames and contingencies.  In most cases, you are allowed to perform all the due diligence and investigation you like.  The property is also normally sold through a title/escrow company that insures clear title, eliminating the need to worry about past judgments that may cloud the title or ownership.  The best part is, you do not pay any commissions for the REALTOR services.  All the commissions are paid by the seller just as they are with a traditional sale.  We represent you and your fiduciary interests and negotiate for you.  Our job is to find you the best deal possible and try to negotiate all your wants and needs successfully.

sounds great, what’s the catch?

There really is no catch but more of a caveat!  Foreclosures can be very competitive.  In a foreclosure market the bank's foreclosure departments can be under staffed and overwhelmed!  Sometimes the banks are pricing homes below market value to solicit quick offers and a speedy escrow time frame.  Since most of these banks are pricing these properties to sell, it is very important that serious buyers are well educated with accurate information and inventory data.  You as a buyer really need to have accurate and timely information, when competing with dozens of other buyers and investors.  Unfortunately there is a learning curve and most buyers don't realize this until they have been beat out 3-4 times on great deals.  We see this happen all the time.  We really try and educate our clients on the most accurate and timely ways to research and view foreclosure data.  Those that heed our warnings and take our advice can get some amazing deals!

RECENT FORECLOSURE LISTINGS IN SLO COUNTY

Foreclosures and Short Sales can carry more risk and liability. Get Legal and Tax Advice! As REALTORS, we cannot give legal or tax advice.  All statements herein are general rules of thumb and are only our opinions, which are subject to change.  Real estate transactions can be very complicated. We ALWAYS recommend consulting an independent Attorney and Accountant to get  legal and tax advice for your specific situation.  Property Listings (including SOLD listings) are a combination of Listings by many brokers not just our company. Please refer to the listing detail page for listing broker credit. Merrill & Associates Real Estate, its agents, Staff and Brokers have not verified the accuracy of any information provided by any source(s) on this website. We make no claim(s) or warranty(s) with regards to any information provided, past, present or future property conditions, investments, or uses.