Buying Bank REO Properties
An REO [Real Estate Owned] property one the lender/bank has taken ownership of, either by agreement with the owner during pre-foreclosure or at the public foreclosure auction. The property has gone through the foreclosure process and has now been repossessed by the foreclosing lender.
The lender typically then sells the property to recover the unpaid loan amount. The lender clears the title for any buyer. The potential bargain is often less than a pre-foreclosure or auction property.
There is no set timeframe within which banks must sell their REOs; however, banks often want to rid REOs with minimal delay to recover funds held in the property.
Buying REO Process
The process to buy an REO Property is:
Contact the lender directly. Ask for the REO or 'Asset Management Department'.
Ask how you can find out what REO properties they hold; and then how you can view and make an offer on the property.
There are several key items you MUST check before making an offer on an REO property.
If the property has been listed with a real estate agent, you can simply contact the listing agent to get all the information you need.
If this is not an exclusive listing, you may want to enquire as to whether the bank is prepared to deal with you directly - this means the commission is now back in the profitability calculations.
Once you have identified the property is a good candidate, you need to do some further digging.