Buying Real Estate Owned (REO)
REO or Real Estate Owned properties are foreclosure homes that left behind after auction. Means REO is the third stage of foreclosure home. When nobody buys the foreclosure home in auction, the property will end up being collected back by the lender and officially, the lender become the owner of the foreclosure home. The lender will settle all the hidden liens and clean up the foreclosure home title before putting the foreclosure home for sale again.
Buying REO is considered as the easiest approach in buying foreclosure home. In this stage, lenders are eager sellers as they do not actually want the properties. Below are the advantages and disadvantages of buying foreclosure (REO)
- Lenders will settle all the other liens before selling the foreclosure home. ( which leave no worries on hidden liens for us, the buyers)
- Least documentation works compared to buying foreclosure through auction and pre-foreclosure.
- There is always a clean title.
- More time to do foreclosure home inspections.
There are much lesser works to do in REO. Because the banks have actually settle most of the possible issues. Buying REO is like a normal home purchase. What you need to do is identify a REO and then approach the bankers and have a meeting in their office. While zipping the coffee you make your offer and the next minute the bankers accept it. And then you are the new owner.
- Savings and profits are much lower.
There are contacts of banks that are holding the REO in foreclosure listings. REO properties in the listings often time are associated with the bankers contact to encourage potential buyers to contact them. So if you were to involve in REO investment, foreclosure listings is one of your best tools in researching.
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