What Is REO Real Estate Listing?
Investopedia describes an REO, or real estate-owned, real estate listing as property owned by a lender after an unsuccessful foreclosure auction. The bank sells these REOs through a Realtor who specializes in these types of properties.
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Types
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REOs are any residential or commercial properties in foreclosure that were not sold at auction. These include single-family homes, condos and office buildings.
Features
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REO properties may have liens on them and other expenses such as taxes due on the home. The lender may take care of these fees before trying to sell the property.
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Benefits
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Banks do not like to own property, so they will usually sell a REO for less than what is owed on the mortgage. Buyers can snap up these homes at a deep discount.
Considerations
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Many REOs are not in the best condition, so buyers should be prepared to renovate the property. Banks sell properties "as is" and will normally not cover repair costs.
Warning
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It sometimes takes longer to buy an REO than a traditional real estate listing because banks do not have to close within a certain number of days. The process could take several months.
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