With limited housing options available in the Denver area, many buyers are looking at REO properties as an alternative to a traditional purchase. While the term “REO” or “foreclosure” may raise red flags for some buyers, the process truly isn’t all that different than buying a non-REO property. Here we’ll shed some light on what an REO property is and the advantages of opting for this type of property.
REO stands for Real Estate Owned and is another term for a foreclosed property repossessed by banks or lenders. If a lender or bank is the highest bidder at a foreclosure auction — or if no one else bids at the auction — the property reverts back to the lender and becomes an REO
For real estate investors and home buyers, bank-owned properties and REOs offer opportunities that are not available in the pre-foreclosure and auction phase of the foreclosure process. Buying bank-owned real estate offers the foreclosure buyer many advantages:
- Bank-owned properties are usually sold at below-market prices with great terms like low down payments and low interest rates.
- Foreclosures that are owned by banks are usually clear of any liens that may have been recorded against the property.
- Since the seller of REO homes is also the lender, you can negotiate with the bank to have them pay for all or some of the closing costs.
- Bank-owned properties are usually vacant because the banks have evicted the previous owner, saving the investor or homebuyer time, money and emotional toll involved in the eviction process.
Interested in checking out REO properties in Denver? Contact Metrowest – one of our experienced professionals will be happy to help!