Bank-owned sales ( real estate owned – REO ) foreclosure
Bank-owned sales ( real estate owned – REO ) foreclosure
A bank-owned or real estate owned also know as REO property is the last stage of the foreclosure process. It is a less risky foreclosure investment (Because the bank owns the property, it will handle eviction, pay off tax liens and may do some repairs), but also the price below the market value is the smaller.
By the time a homeowner has been foreclosed on and evicted, plenty of would-be investors have already had and passed up their chance to buy the house, usually for good reason.
After failing to sell the house and to get what it’s owed, the bank then hires an outside real estate agent to put the property on the market, usually at a lower price than the market value.
The buyer now, can tour the home and do all the due diligence needed to make an informed decision,
Those homes often sit on the market for a long time abandoned and dusty until someone finally offers the bank’s target price.
Some major banks may, with signs of a bottom to the real estate market and inventories of unsold homes continuing to increase, engage what is known as post-foreclosure auctions, to sell off their properties, many times offering advantages over government-administered foreclosure auctions.
Where to find bank-owned properties (REOs)?
The best ways to find bank-owned properties:
MLS – Most lenders list their REO properties on the Multiple Listing Service (MLS).
Bank websites – Some banks have an entire department set up to sell REOs.
Online specialists – Most other online foreclosure listing services charge a fee (Zillow for instance).