What’s the Difference between a Foreclosure and an REO Property?

If you’re considering distressed properties in your Denver home search, you may be confused with all of the different terms. Short sales, HUD housing, real estate-owned properties and foreclosure properties can all be a great way to break into homeownership, but it’s important to know the differences between these types of properties before you decide which might be right for you. Here we’ll break down the differences between foreclosure properties and REO properties so you can determine which fits your needs the best.

  1. Buying an REO property tends to be easier than a foreclosure. In this situation, the bank that owns the property wants to sell it as quickly as possible, so they hire a real estate agent to close the sale. You can buy one of these bank-owned properties by making an offer, just as you would with any other type of home sale. The bank will either accept or counter, and you proceed just as you would a traditional sale.
  2. REO properties can be a great value. While the bank will want to get the most they can from the sale, REO properties are generally listed at fair market value.
  3. In a foreclosure situation, lenders auction off homes after the owners stop paying their mortgages. These properties are sold at public auctions. The property becomes an REO after it does not sell at auction, and the bank takes ownership of it. These bank-owned properties (REOs) are listed and sold by real estate agents.
  4. Auction Buying can be Difficult
    Buying a foreclosure at a real estate auction can be challenging. Not only are you trying to outbid professional real estate investors, but often these purchases are cash only.
  5. Auction homes are sold sight-unseen. That means you’ll have no idea what repair jobs face you after you complete your purchase.

Are you interested in checking out REO or foreclosure properties in Denver? Contact Metrowest today – we specialize in these types of sales and 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.

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