Definition of REO Properties
REO properties, also known as Real Estate Owned properties, are a type of property owned by a lender after a repossession and auction process. Properties only become REO properties after their ownership transfers from the original owner to the lending agent, usually due to failure or inability to make mortgage payments. Here are some additional facts about REO properties.
-
What Makes a Property an REO Property?
-
A property is considered REO if it has been repossessed by the lending authority, and if that lending authority has been unable to transfer ownership of the property to a different, paying owner.
How Does a Property Become REO?
-
A property becomes REO if a lending agent repossesses it, tries to auction it for the amount due on the loan and fails to find a suitable buyer. At that point, the property becomes an REO property under the ownership of the lender.
Who Owns REO Properties?
-
REO properties are almost always owned by banks and other lending institutions, after repossession from a defaulted mortgage.
What Are the Benefits of Having REO Properties?
-
To the lending authority owning the property, there is little benefit to owning an REO property, as it represents an investment gone bad. By definition, an REO property is real estate that cannot be sold at auction for the minimal price of what was owed in the loan, so every REO property owned is property that came at a loss to the lender.
Are REO Properties Available for Purchase?
-
REO properties are always available for purchase, and are often excellent deals. REO properties can be found by checking local Realtor listings.
-
