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.
- 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.
- 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.
- 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.
- 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.
- 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.