Whether you are planning a permanent residence in South Jersey or are new to the area, you will be able to enjoy the diversity of the area.
There are many homes I will be able to show you in the South Jersey real estate business and many that you can get at a decent price because they are a Real Estate Owned property.
Foreclosure Homes For Sale in South Jersey
Real Estate Owned or REO means that a lender owns a property. This lender is typically a bank, government agency, or government loan insurer. They will own a property when it was unsuccessfully sold at a foreclosure auction. During the auction, a foreclosing beneficiary will more often than not set the starting bid for at least the outstanding loan amount. When there are no bidders at the auction, the beneficiary will then officially foreclose the property and it will then become one of the foreclosure homes for sale in South Jersey.
When there are no bidders on the property, it is normally because the amount owed on the property is more than the market value at the time. As soon as the beneficiary repossesses the property they will list it on their books as REO and it will be categorized as an asset (non-performing asset).
For you, there are three different stages that you can buy a foreclosure home at. Before a foreclosure auction takes place, investors and homebuyers can purchase the home in the first phase of default. Investors can also purchase the property at the public foreclosure auction. Lastly, if no one bids at the auction, a property that has been foreclosed on can be bought from the bank or lending institution after it has been repossessed.
Once the property is purchased by the bank at the public foreclosure auction, it then reverts back to the bank becoming a bank-owned REO property. Anyone can buy one of these properties.
Before a property becomes REO, the property goes into distress because the homeowner or borrower has missed mortgage payments. Once this happens, a beneficiary will want to determine the amount of equity the property has.
A popular way to determine the equity on a property is by obtaining a Broker's Price Opinion (BPO) or order an appraisal. Based on this, the bank will decide if they will allow a short sale if it is requested by the homeowner. If a short sale is not requested, that is when the beneficiary will continue the foreclosure process where it may or may not become an REO property.
Property For Sale in South Jersey
Once the beneficiary has put the property in their books as REO, they will go about putting the property for sale in South Jersey. To sell the property, the beneficiary will sell it on its own or enlist the service of a REO Asset Manager. The beneficiary will also remove the liens and debts from the property to try and resell it to the public. They will do this either by future auctions, direct marketing through a real estate broker, or by itself. The asset manager may contact REO realtors that specialize in certain ZIP codes so they can assist in selling these properties. Real estate investors may purchase a REO property because of discounts offered to compensate for the condition of the property.
REO properties are usually in poor condition and will require maintenance and repairs to follow the upkeep laws and prepare the property for sale. This is usually the responsibility of the mortgage servicer and provided by a specialized property preservation company. The services they offer include securing the property by changing locks and boarding up, debris removal, property maintenance and rehabilitation.
If you aren’t sold on the idea of a REO property, there are a lot of benefits that will make you close the deal.
- The first thing that buyers will like is you do not have to go through homeowners. You buy the home directly through the bank. You won’t have to deal with getting people to move out of your home. Also, the bank isn’t attached to the home so you will not have to deal with sellers that are reluctant to negotiate because they don’t want to give up the home.
- You also will not have to deal with any outstanding taxes. If the last homeowner stopped paying property tax you won’t have to worry about it. The bank should waive those fees for you. If you want to be safe, you can do a title search.
- If you buy at home at a foreclosure auction, there isn’t a way to get a home inspection. When you buy a REO from the bank, you can, and should, ask for a home inspection. Because REO properties are usually distressed properties, you want to make sure everything is taken care of before you close on a deal.
- The biggest thing people like about REO properties is that they are below the market value. Unfortunately, if there are a lot of repairs and renovations that need to be made on the home, it can quickly make the price go up.
REO properties can be a great benefit for you as long as you have the right professional help. You should get an experienced realtor to go through with the negotiations on a real estate owned property.