Foreclosure in 02119>Question Details

Julia Mejia, Home Buyer in 10031

how long does it usually take to close on a 'REO" property? Is the process difficult? Thanks in advance.

Asked by Julia Mejia, 10031 Sun Sep 28, 2008

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This question is about this property: http://www.trulia.com/foreclosure/2001988855--Chesterton-St-…

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Hi Julia. I am a Realtor, and Realtor trainer, in San Bernardino/Redlands area of California. I think you will find most REO deals go thru in about 30 days. However, there are plenty of exceptions. Bring cash and they will close your deal a lot sooner quite often. Even with a mortgage, often they will accomodate a quick closing.
Then there are some, like Wells Fargo right now, where you will be lucky to close in 45 days I think. They are considered just really backlogged.
Several of the banks are attaching "per diems" to escrows closing slowly because you or your lender are not getting the information to the escrow company fast enough. The Calif. Assn of Realtors legal staff are telling us that the courts don't like the per diems and will not back them in court cases, but I think it best you pay them respect for the time being.
Hope this helps.
Jeff Larson at Tarbell, Realtors in San Bernardino. MailTo:IPhoneJeff@Yahoo.com
2 votes Thank Flag Link Sun Sep 28, 2008
REOs can take a bit longer. Be sure to understand when you are dealing w/ a short sale that needs bank approval versus an REO which is a bank owned property. With an REO, the bank owns the property and generally has some level of commitment to the selling process to get the property off of their books. Some banks are motivated and reasonable, and others are not. I have witnessed banks moving along quickly with good communication and watched as other banks let the best buyers fade into the horizon. As a rule, REO property transactions move much quicker than short sales.

In an auction type of pricing stratetgy, I have seen banks settle for less than their expectations when mulitple offers all fall short of the bank's target. If the bank has only one offer at a price less than desired, the bank may hold out. When the bank has 4 offers and all fall short, the market has made a clear and compelling statement and most logical people will listen. Disclaimer: Banks are not always logical.
1 vote Thank Flag Link Mon Oct 6, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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Julia,

The duration of the REO sales process will vary from home to home so it's difficult to assign a period of time. But we can confidently say a REO closing should take place in a much shortr period of time than a "short sale." Short sales can take 4, 5, 6, months.

We just did a foreclosure that closed in 3 weeks....but the buyers were preapproved and ready to go.

Good luck,
The"Eckler Team"
1 vote Thank Flag Link Wed Oct 1, 2008
I have represented buyers 4 or 5 times this year with REO properties. Keep in mind that although you have the opportunity to have the property inspected, there is no negotiating with the bank. The process is usually quick but you should make sure that your closing attorney has experience with short sales and foreclosures because a few extra T's need to be crossed and I's dotted- generally not a big deal.
1 vote Thank Flag Link Wed Oct 1, 2008
The proces is usually the same as a regualr sale with some exceptions that need to be followed to make sure it closes. you want to make sure the foreclosure deed is on record or in the hand of the title company, this is teh number one reason for delays. they need that deed on file in order to write the deed from the bank to you. The other things is to make sure the closing company gets teh HUD and deed to the bank a good week ahead of closing so the bank has time to approve it, sign it and get it back in time for you to sign in time. Most banks will take 3 days to do this. i like givng them extra time as you never know. goo dluck with your purchase
Web Reference: http://www.ScottSellsNH.com
1 vote Thank Flag Link Mon Sep 29, 2008
Hi Julia,
It is my experience that REO properties will go through much quicker and on a more traditional time schedule, as long as the offer is reasonable. They are night and day compared to short sale and pre forclosure sales that require bank approval. Make sure you have a Real Estate Lawyer look over the paperwork. Many times a bank will not allow changes to the P&S and you want to make sure you fully understand what you are agreeing to. Good Luck!
1 vote Thank Flag Link Mon Sep 29, 2008
The real answer is, yes, it is difficult to close on these properties but it is widely dependent on the bank and their relationship with the agency they have hired to help sell it. Some banks are much more organized and ready to sell at the price being marketed, and other times the agent has put a price on the property in attempt to start an auction of sorts on the property. In the later situation they will literally keep waiting until they get their price. You could end up waiting 3 weeks just to get an answer on whether they have accepted your offer price. Also, prepare to not be able to negotiate. Generally speaking I would say these deals take 2+ months to close but again that varies.

I am not trying to discourage you from REOs but I think it is important to understand the time and patience you will need in order to get one of these deals to actually close.

Hope that helps!
0 votes Thank Flag Link Mon Oct 6, 2008
In most cases, REO properties should take the same amount of time but the biggest thing is making sure that title is transferred from previous owner to bank. If that is not done, then it can be a big delay in closing. Also, on REO properties, you can still try to negotiate repairs with the bank and also for the bank to pay closing costs. All banks are different but I've worked with banks that will pay some of those costs so don't be afraid to ask especially if that property has been on the market for awhile.
Web Reference: http://www.jroark.com
0 votes Thank Flag Link Wed Oct 1, 2008
In my experience, its not really a time crunch that will cause delays with a REO, its the little issues that crop up when you get close to closing. Its all about preparation on the part of the RE Attorney or the Title company. If they treat it like just another file that will close and pick it up 3-4 days from closing to work on it, then it will undoubtedly be delayed beyond the P & S date. Its important for that atty to contact sellers representation very early in the process to get things going and to get the final figures and bills approved.
0 votes Thank Flag Link Mon Sep 29, 2008
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