Purchasing REO property or a foreclosure in Denver?


	Purchasing a bank-owned property is not something to be taken lightly. Should you have any questions regarding real estate in Denver, Colorado, call me or send me an e-mail.

What is an REO?

"REO" or Real Estate Owned are homes which have been through foreclosure and are currently possessed by the bank or mortgage company. This is not the same as real estate up for foreclosure auction. Cherry Creek Properties has experience to share with foreclosures and bank owned properties in Denver, Colorado

Cherry Creek Properties has experience to share with foreclosures and bank owned properties in Denver, Colorado

When buying 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 willing to pay with cash in hand. Finally, you'll get the property 100% as is. That possibly may include existing liens and even current occupants that may require expulsion.

A bank-owned property, by contrast, is a much cleaner and attractive option. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will see to the elimination of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.

Take notice that REOs may be exempt from normal disclosure requirements. For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement, a document that usually requires sellers to tell you about any defects of which they are knowledgeable. By hiring Cherry Creek Properties, you can rest assured knowing all parties are fulfilling Colorado state disclosure requirements.

Is REO property in Denver a bargain?

It is commonly presumed that any REO must be a good deal and an opportunity for guaranteed profit. This isn't necessarily true. You have to be cautious about buying a REO if your intent is make a profit. While it's true that the bank is often eager to sell it soon, they are also looking to minimize any losses.

Cherry Creek Properties has experience to share with foreclosures and bank owned properties in Denver, Colorado

Look closely at the listing and sales prices of similar properties in the neighborhood when considering the purchase of an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in. The bargains with money making potential exist, and many people do very well flipping foreclosures. But there are also many REOs that are not good buys and may lose money.

All set to make an offer?

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

Prior to making your offer, you'll want to contact either the listing agent or REO department at the bank and learn as much as you can about their knowledge about the condition of the property and what their process is for accepting offers. Since banks usually sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for hidden damage and retract the offer if you find it. As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.

Once you've submitted your offer, it's customary for the bank to counter offer. From there it will be up to you to decide whether to accept their counter, or make another counter offer. Your transaction might be final in one day, but that's rare. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.