What is a Real Estate Owned Property?

If you’ve heard the term “distressed property” you may wonder exactly what that entails. It’s actually a larger umbrella for a few different types of homes. Bank or real estate owned (REO) properties, foreclosure properties, and short sale properties are all types of 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 should you decide it’s the right type of housing for you.

Real estate owned properties, or REO 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, though 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. If you’re really serious about a particular REO, you might consider getting preapproved by the lender that owns the property.

The second thing you’ll want to do is find an agent who truly knows and understands the REO buying process. Like we said, it’s a bit different than traditional sales and an experienced agent will help you navigate the waters. If you’re interested in checking our distressed housing in the Denver metro area, give Metrowest a shout. We specialize in REO purchases and we would love to help you start the process!

 

Ken Blevins

About Ken Blevins

Ken Blevins, CEO of Metrowest Real Estate Services, is a veteran in mortgage and default servicing with more than 24 years of experience in collections, foreclosure/bankruptcy, loss mitigation and real estate disposition (REO). Blevins was an original co-founder of Metrowest in 2003, a Real Estate Brokerage and Services Company focused on the resale, recovery and liquidation of distressed real estate in Denver, Colorado and surrounding metros. Blevins assumed the role of CEO in January 2014 and provides strategic direction and has management accountability for the day-to-day operations. Under his direction, Blevins drives all default management operations to maximize asset value recovery and reduce loss severity through a strategy focused on customer service and state of the art technology. Blevins has 18 years of direct operational experience in all facets of REO Asset Management having managed large national REO Disposition contracts for Fannie Mae, Freddie Mac, Wells Fargo, JP Morgan Chase, CitiFinancial, GMAC Mortgage and other various financial institutions. Blevins specialties include REO asset management, real estate investment, bulk REO acquisitions and distressed asset recovery and liquidation, and he has directed the resolution and liquidation of over ten billion in institutionally-owned residential real estate.

Get More Real Estate Market Info... Subscribe Below!

Learn more about us and find other resources on buying investment properties with us. Like us, follow us, connect!

No comments yet.

Leave a Reply