Making an offer on REO Property or a Foreclosure on Long Island in Nassau/Suffolk County on the "North Shore" or "South Shore" in the following communities?

• Nassau County -Baldwin, Garden City, Levittown, Valley Stream, Manhasset, New Hyde Park, Port Washington, Cold Spring Harbor, Glen Cove, Great Neck, Lloyd Harbor, Muttontown, Hicksville, Oyster Bay, Old Brookville, Roslyn, Massapequa, Wantagh, Bethpage, Seaford, Syosset, Woodbury and the surrounding areas.
• Suffolk County - Babylon, Lindenhurst, Bayshore, Brightwaters, West Islip, East Islip, Oakdale, Sayville, Bayport, Huntington, Northport, Stonybrook, Kings Point, Smithtown, Saint James, Port Jefferson, Setauket, Mount Sinai, Miller Place, Center Moriches, Selden, Holbrook, Ronkonkoma, Medford and the surrounding areas. 

	Investing in a bank-owned property is not something to be taken lightly.

What's an REO?

"REO" or Real Estate Owned are houses which have gone through foreclosure that the bank or mortgage company now possesses. This is different than 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 added during the foreclosure process. You must also be prepared to pay with cash in hand. To top everything off, you'll receive the property completely as is. That possibly could comprise of existing liens and even current residents that need to be removed.

A bank-owned property, on the contrary, is a much neater and attractive option. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The lender will attend to the elimination of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.

Do be aware that REOs may be exempt from typical disclosure requirements. For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement, a document that usually requires sellers to make known any defects they are informed of. By hiring Cafarelli Realty Corp, you can rest assured knowing all parties are fulfilling New York state disclosure requirements.

Is REO property a bargain?

It's sometimes presumed that any foreclosure must be a good buy and an opportunity for guaranteed profit. This isn't always the case. You have to be prudent about buying a repossession if your intent is make money. Even though the bank is often anxious to offload it fast, they are also looking to minimize any losses.

Look carefully at the listing and sales prices of competing homes in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades 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.

Ready to make an offer?

Most mortgage companies have a department dedicated to REO that you'll work with in buying REO property from them. Commonly 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 find out as much as you can about what they know concerning the condition of the property and what their process is for getting offers. Since banks almost always sell REO properties "as is", it may be in your best interest to 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 respond with a counter offer. From there it will be your decision whether to accept their counter, or submit another counter offer. Your transaction might be settled 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.