Charlotte Metro Foreclosures

If you are shopping for a home you may be interested in foreclosures, also called a real estate owned (REO) property. An REO property is owned by the lender as a result of the previous owner defaulting on the loan.   The words foreclosures, REO, and bank-owned can have slightly different meanings but are commonly used interchangeably.  

How do you buy a foreclosed home?

The most common way of buying a foreclosure in through a Real Estate Agent after the bank has taken possession of the property and hired a broker to list it for sale.  A much less common way is to buy the property at public auction.  In North Carolina when someone defaults on a mortgage the lender is given the power to sell the property at auction.  In most cases the property does not sell so the lender takes possession and hires a broker to sell the property in much the same way that any homeowner would sell.  Generally buying a foreclosure at auction is best reserved for seasoned real estate investors.  For the average homebuyer the risks of buying at auction outweigh the benefits.  

 

Differences between a typical real estate transaction and the purchase of an REO property

The biggest differences between purchasing a foreclosure versus a typical owner-occupied resale home are:

 1.  Negotiating the details of the purchase, such as price & closing dates, may take longer because the process can require multiple levels of approval.

2.  Because the seller - the bank - has not owned the property for long or occupied the property they are generally unaware of any history and do not have records of maintenance.  

3.  Banks often have rigid requirements for the purchase including restricting the amount of time you have to inspect the property or the length of time you have before you must close to periods that are less than typical for our market.

4.  There is often an exorbitant amount of paperwork as the banks will often have their own contracts or lengthly addenda that must be signed by all parties.

Aside from these differences buying a foreclosure through a Realtor is very similar to purchasing a non-foreclosed home.

 

Latest Foreclosure Listings

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