Though often misunderstood, real estate owned (REO) properties – also known as bank-owned properties – can be a great way to break into homeownership. While not identical to a traditional sale, buying an REO property isn’t as challenging as you may think. If you’re considering purchasing an REO property, check out the questions and answers below to see if this may be the right option for you.
What is an REO property?
An REO property is one that has gone through the foreclosure auction process and did not sell. The house then becomes property of the lender who authorized the initial loan. REO stands for “real estate owned.”
How do I buy REO properties?
While REO properties aren’t extraordinarily different than traditional transactions, there are some caveats that you should be aware of. Because of this, it’s super important to find an agent who specializes in REO sales. Agents specializing in REO sales can show you available listings, provide comparable information to other REO properties in the area, and help you determine the best offer price.
What are the benefits of buying an REO property?
Firstly, bank-owned properties come without liens (tax liens, mechanics liens, third-party liens, etc.) and other constraints. Additionally, REOs can often be listed below market value because the banks want to get them off their books as quickly as possible. Lastly, in the case of REOs, the lender is also the seller, so you have a better chance of negotiating better terms.
Just because REO properties aren’t as common as traditional sales don’t make them bad investments. In fact, REOs can present great opportunity, especially if you have a pro on your side who can help guide you through the process. If you’re interested in checking out REO properties in the Denver area, contact Metrowest. We specialize in these types of sales and would love to help you get started!