REO & Closings
When you are planning to buy an REO property, it is critical to have an experienced real estate attorney who is familiar with REO and closings, and who can ensure that all requirements are met for a smooth transaction. Buying REO properties is different from buying other types of properties in multiple ways. Accordingly, it is critical to understand how the process works and how REOs are distinct. Our experienced attorneys can speak with you today about your real estate plans, and we can assist you with all aspects of closing on an REO property.
What is an REO Property in Florida?
The letters “REO” are an acronym that refers to a “real-estate owned” property, yet even the term does not fully explain what this type of property it is or why a purchase would be distinct from other types of residential and commercial property purchases. REO properties are those that are owned by a bank or a mortgage lender and that have not sold at a foreclosure auction. Given the high rate of foreclosures that followed the real estate crash in 2008 and later the COVID-19 pandemic, many parties in Tampa and across the state may be considering an REO property, yet it is essential to understand that these transactions do come with some risk and lack of flexibility.
For banks, there is an incentive to sell REO properties quickly, but it is important for buyers to have all relevant information and counsel from an experienced real estate lawyer.
How REO Properties are Different from Other Properties
There are numerous ways in which REO properties are distinct from other Tampa real estate for sale, including but not limited to the following:
- REO properties are always sold on an “as-is” basis, without any guarantees or warranties;
- Many REO properties have been sitting for some time since they have gone through the foreclosure process, which can make risks of damage and structural more likely depending upon the specific property;
- REO properties usually come with waivers of liability or disclaimers, and it is unlikely that a buyer will be able to negotiate any of those terms;
- More extensive physical inspections of the property are often necessary to determine any defects due to waivers of liability and to reduce the buyer’s risk;
- Counter-offers from banks for REO properties can require the purchase process to be sped up, which can limit the buyer’s ability to perform due diligence;
- Banks will typically accept the highest offer on an REO property without considering other factors concerning the buyer’s interest in the property; and
- Failing to close by an agreed-upon closing date may result in penalties for the buyer.
Seek Advice from a REO & Closings Lawyer
If you are considering an REO property, you should speak with one of our experienced REO and closings attorneys about the purchase process for these bank-owned properties and what you should expect at closing. Our firm can represent you throughout the process and can begin working with you today. Contact Gilbert Garcia Group, P.A. to learn more about our services.