In the real estate world, REO is an acronym for real estate owned, a term used to signify a property that has failed to sell at a foreclosure auction and is now owned by a lender, most likely a bank. In today’s climate, REO transactions have become more common place. The attorneys at Berlin Patten Ebling understand the significance and risk involved in REO transactions. In most instances the lenders will want to control the entire transaction and eliminate any post-closing liability.
REO property is typically property that has been left idle for some period of time, and as such, is exposed to the risk of known and unknown damage. As a result, lenders who sell REO property typically do so with fairly detailed and comprehensive disclaimers and waivers of liability. In essence, one who buys REO property does so completely at their own risk, and these waivers/disclaimers are generally non-negotiable. This is fine, as often times the prices reflect this fact. However, anyone who acquires REO property should perform fairly comprehensive physical inspections to understand that risk and also perform a follow up physical inspection of the property on the closing date.
Lenders are known to provide lengthy counter offers that essentially remove any liability, shorten the due diligence window, provide only insurable title (versus marketable title), and provide no warranties of title or otherwise. As a result, the attorneys at Berlin Patten Ebling pay special attention to the contractual terms, title requirements and exceptions, and closing/title agent communications. In most instances, we order a title commitment in advance of the contract.
As such, we strongly recommend that anyone acquiring REO property obtain the services of an experienced inspector to perform comprehensive inspections of the property, and a real estate attorney to make sure that the closing is being handled properly and in the most cost effective manner to the buyer possible, and that proper title will be conveyed to the buyer.
We are committed to providing an exceptional customer experience while navigating the hazards of REO closings. We are available at every step of the process and answer questions in a timely manner in order to keep you informed of all progress in your transaction.
Contact us to schedule a consultation in which we can answer your questions and recommend the best steps to take. We serve clients throughout Southwest Florida from offices in Sarasota, Venice and Lakewood Ranch.