Interested in REO property or a foreclosure in Santa Barbara? Savvy consumers will turn to a seasoned pro when considering a foreclosed property. What's an REO? "REO" or Real Estate Owned are houses which have been foreclosed upon and are now owned by the bank or mortgage company. This differs from a property 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 amassed during the foreclosure process. The buyer must also be able to pay with cash in hand. Finally, you'll accept the property 100% as is. That might involve prevailing liens and even current tenants that may require removal. A bank-owned property, conversely, is a much neater and attractive proposition. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The lender will take care of the removal of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing. You should be aware that REOs may be exempt from typical disclosure requirements. For example, in Texas, 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 Goodwin & Thyne Properties, you can rest assured knowing all parties are fulfilling California state disclosure requirements. Is REO property in Santa Barbara a bargain? It's occasionally believed that any REO must be a good buy and a possibility for easy money. This frequently isn't true. You have to be very careful about buying a repossession if your intent is to make money off of it. While it's true that the bank is typically anxious to sell it soon, they are also motivated to get as much as they can for it. Look carefully at the listing and sales prices of competing homes 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 buying and selling foreclosures. But there are also many REOs that are not good buys and may not be money makers. Prepared to make an offer? Most mortgage companies have staff dedicated to REO that you'll work with while buying REO property from them. Typically 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 their knowledge about the condition of the property and what their process is for taking 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 withdraw the offer if you find it. As with making any offer on real estate, your offer may be 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, you can expect the bank to make a counter offer. Then it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Your transaction could be settled in a single day, but that's usually not the case. 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.

Learn more about our “Smart Buyer Program” and “Smart Seller Program”.  
These programs are designed to save you thousands of dollars on your next
purchase or sale while providing you the best service in the industry. 
Call  (805) 899-1100  or e-mail  TeamGT@GTprop.com with any questions.

CA DRE #01477382