Interested in REO property or a foreclosure in Portsmouth?

What is an REO?

"REO" or Real Estate Owned are properties which have completed the foreclosure process and are now held by the bank or mortgage company. This is unlike real estate up for foreclosure auction.

When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process. You must also be willing to pay with cash in hand. To top everything off, you'll receive the property 100% as is. That could comprise of prevailing liens and even current tenants that may require eviction.

A bank-owned property, conversely, is a more tidy and attractive option. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The lender will take care of the removal 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 standard disclosure requirements. For example, in California, banks are not required to give a Transfer Disclosure Statement, a document that ordinarily requires sellers to disclose any defects of which they are informed. By hiring RE/MAX Shoreline, you can rest assured knowing all parties are fulfilling New Hampshire state disclosure requirements.

Is REO property in Portsmouth a bargain?

It's sometimes assumed that any REO must be a bargain and a chance for guaranteed profit. This simply isn't true. You have to be cautious about buying a repossession if your intent is to make a profit. While it's true that the bank is typically eager to sell it soon, they are also looking to get as much as they can for it.

Look closely at the listing and sales prices of comparable properties in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in. There are bargains with potential to make money, and many people do very well buying foreclosures. Still, there are also many REOs that are not good buys and may not be money makers.

Time to make an offer?

Most mortgage companies have staff dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will frequently use a listing agent.

Before 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 concerning the condition of the property and what their process is for receiving offers. Since banks most commonly 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. If, as a buyer, you can provide documentation showing your ability to secure financing, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This goes for any type of real estate offer.)

After you've presented your offer, it's customary for the bank to respond with a counter offer. At this point it will be your choice whether to accept their counter, or make another counter offer. Your transaction might be final in a single 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.