What Are REO Sales?
According to the FDIC, 1 in 200 homes go through the foreclosure process, but not all properties are sold at the auction. Banks assume ownership of these properties and sell them to home buyers and property investors through REO (real-estate-owned) sales.
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Features
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REO sales are the sales of bank-owned properties that have gone to foreclosure auction and received no winning bidders. These properties are often obtained for less than the market value of the property.
Property Sources
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Property sources for REO sales are found through bank websites, real estate brokers and the U.S. Department of Housing and Urban Development.
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Financing
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Financing options vary from lender to lender. Some lenders also offer special mortgage incentives when purchasing one of their properties.
Property Condition
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Most properties are sold "as is" and come without warranties or guarantees for work done on the property. Buyers need to be aware that properties may have been repaired in order to be more marketable. Buyers should also consider hiring a professional home inspector to determine the condition of the property.
Considerations
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REO sales are typically handled through selected real estate agents.
Buyers should expect longer waiting times than normal to get a deal accepted. Banks move slowly through the process.
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References
Resources
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