Properties in Foreclosure or REO
If the sale involves property that has been foreclosed or is the process of being foreclosed, please provide a contact with either the selling entity or their representative handling the foreclosure or the REO.
A decade ago REO properties were rare. They are not now. These homes provide wonderful opportunities for buyers and for the economy as a whole, but they are somewhat tricky. Nevertheless, as we exit the recession, some people are going to be pleasantly surprised at the return on their investment of time, money and labor in light of the purchase price they paid and the mortgage rates they obtained.
The closing process used on REO properties is generally twofold:
- The law firm closing the sale must run the chain of title to the property at the courthouse in order to verify the title is in the lender and ascertain (1) what matters encumber the title, (2) whether the foreclosing process itself was according to Georgia law, including verification of the paper trail connecting the foreclosing entity with the former mortgagee and (3) the seller’s authority to sell through its authorized employees and/or agents as proper.
- In the meantime, the buyer, during the due diligence period of the contract, is performing inspections to ensure satisfaction with the physical condition of the property because the contract calls for a sale “as is where is” thereby disclaiming any liability for any physical conditions of the property, the improvements located thereon, the neighborhood which it is located and generally any other matters known or unknown about the subject property. In other words, the lender will not entertain any dissatisfaction with the physical condition of the property after the sale is closed. The buyer would be well advised to do a walkthrough of the property immediately preceding the closing and to secure the same immediately thereafter. We have seen instances where the air conditioner unit itself can disappear the night before the closing as well as the carpets, appliances or any other item that can be hauled away.