Buying REO property or a foreclosure in Barrington?


	Just as with any home purchase, your smartest move is to hire a professional real estate agent. Should you have any questions regarding real estate in Barrington, Illinois, call me or send me an e-mail.

What is an REO?

"REO" or Real Estate Owned are properties which have been through foreclosure that the bank or mortgage company now holds. This is different than real estate up for foreclosure auction. COLDWELL BANKER RESIDENTIAL BROKERAGE has experience to share with foreclosures and bank owned properties in Barrington, Illinois

COLDWELL BANKER RESIDENTIAL BROKERAGE has experience to share with foreclosures and bank owned properties in Barrington, Illinois

If you buy a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accrued during the foreclosure process. You must also be ready to pay with cash in hand. Finally, you'll get the property 100% as is. That may consist of prevailing liens and even current residents that may require eviction.

A bank-owned property, by contrast, is a much cleaner and attractive deal. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The bank will handle the elimination of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.

Note that REOs may be exempt from normal disclosure requirements. For instance, in California, banks are not required to give a Transfer Disclosure Statement, a document that usually requires sellers to disclose any defects of which they are informed. By hiring COLDWELL BANKER RESIDENTIAL BROKERAGE, you can rest assured knowing all parties are fulfilling Illinois state disclosure requirements.

Is REO property in Barrington a bargain?

It's commonly thought that any REO must be a good buy and a chance for easy money. This isn't necessarily true. You have to be cautious about buying a repossession if your intent is to make money off of it. While it's true that the bank is usually anxious to sell it fast, they are also looking to get as much as they can for it.

COLDWELL BANKER RESIDENTIAL BROKERAGE has experience to share with foreclosures and bank owned properties in Barrington, Illinois

When contemplating what to pay for REO property, carefully analyze comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale. The bargains with money making potential exist, and many people do very well buying foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.

Time to make an offer?

Most lenders have a department dedicated to REO that you'll work with in buying REO property from them. Normally the REO department will use a listing agent to get their REO properties listed on the local MLS.

Before making your offer, you'll want to contact either the listing agent or REO department at the bank and find out as much as you can about what they know about the condition of the property and what their process is for receiving offers. Since banks usually sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unknown damage and retract the offer if you find it. As with making any offer on real estate, providing documentation of your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.

After you've submitted your offer, it's customary for the bank to make a counter offer. At this point it will be your decision whether to accept their counter, or submit another counter offer. Your transaction might be final in one day, but that's rare. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.