REO stands for "Real Estate Owned". These properties have gone through foreclosure and are now owned by a bank or mortgage company. This is not the same as a property going up for foreclosure auction. With a home purchased through foreclosure auction, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process. Also you must be prepared to pay with cash on hand. On top of that, you'll receive the property 100% "as is". That may include existing liens and even current occupants that need to be evicted. An REO, by contrast, is a much "cleaner" and attractive transaction. The REO did not find a buyer during the foreclosure auction. The bank now owns it. The bank will see to the removal of tax liens, evict occupants if necessary, and generally prepare for the issuance of a title insurance policy to the buyer at closing. Also REO's are mostly exempt from normal disclosure requirements.
You have to be very careful about buying an REO if your intent is to make money off of it. While it's true that the bank is typically anxious to sell it quickly in today's market place, they are also strongly motivated to get as much as they can for it. When considering the value of an REO, you need to look closely at comparable sales in the neighborhood and be sure to take into account the time and costs of any repairs or remodeling that may have to be completed to prepare the home for resale. Many REO money making opportunities do exist if purchased at the right price. A real estate agent might be your best resource to helping you understand and evaluate potential properties for purchase.
Ready to Make an Offer? If you are seriously considering purchasing an REO for either an investment or personal property, you should contact New Visions Realty LLC to assist you with the process. New Visons will obtain a list of REO properties to view from the banks or listing agents handling the sales for the bank. Many banks have REO departments whose job it is to manage the properties for sale and negotiate on behalf of the bank. Their whole mission is to sell the property for the highest price. Keep in mind that they work wholly for the bank that owns the property. When considering buying an REO, it is highly recommended you obtain the professional services of a real estate agent to negotiate on your behalf and look out for your best interests. Also, be prepared for dealing with the REO process, since typically there will be more than one person involved with the sale at the bank's level. The bank will not be open evenings and weekends, making negotiations last sometimes last longer. If you would like more information on REO owned property, or just have general questions about the process, please feel free to contact New Visions Realty or fill out the NO OBLIGATION questionnaire at the bottom of this page.
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