Lots of people flocking to the Mile High City are considering distressed properties in their searches to help expand their potential housing options. This is actually a great way to break into homeownership in areas with low inventory. Bank or real estate owned (REO) properties, foreclosure properties, and short sale properties all fall under the blanket term “distressed housing.” While there are similarities among all these types of housing, the buying process for them varies a bit. Here we’ll take a closer look at REO properties and what you should know to help determine if it’s the right type of housing for you.
Real estate owned properties are houses that have been seized by banks or other lenders from people who are unable to pay their mortgages. When lenders offer mortgage loans, they see them as an investment because they will earn money from the interest on the loan. So to salvage their investment, banks foreclose on homes with unpaid mortgages and sell the properties at foreclosure auctions. If a home doesn’t sell at auction, it becomes an REO property.
Once the bank owns the property, it will handle eviction (if necessary) pay off tax liens and may do some repairs. It’s important to know, however, that sometimes REO properties are sold “as is.” This type of housing comes in all shapes and sizes, and while REO listings may need minor repairs and cosmetic fixes, they are often in relatively good shape.
If you’re serious about purchasing an REO property, the first thing you’ll want to do is get your finances in order and get prequalified for a loan. Step number two is to find an agent who truly knows and understands the REO buying process. Metrowest specializes in these types of sales and would love to help you start the process – give us a shout today!