Types and Stages of Foreclosure Homes

3. Real Estate Owned (REO) Properties

What is a REO?

REOs frequently are known as bank foreclosure homes. This occurs when an owner fails to pay payments owed on a mortgage. The lender is then able to purchase the home back at a foreclosure auction.

How do I find REOs?

You can find REO property using the same methods as you would when searching for foreclosure homes. We advise you to establish an association with lenders or with local realtors who manage and market the REOs that go for sale. You can also find REO properties by word of mouth.

How can I purchase REOs?

The process of purchasing REO property is simple, and not as difficult as many think. By simply submitting a written contract to the lender's broker or directly to the lender, this process can be achieved. Inform yourself of everything about the foreclosure home before deciding to purchase them.

How much money do I need to purchase REO homes?

The total amount of the deposit varies, and depends on the amount the lender selects and the actual value of the property. Prices range from as little as $500 to as much as $5,000. The final price will be determined submitted with the offer you make. Once the date, price and terms, are settled you must obtain funding from a lender to finalize the buying process.

What should I be aware of when buying REO homes?

Keep in mind that each lender has different policies on the loans they lend. Some lenders may not offer loans to homebuyers, while other lenders may not offer loans to investors. You should always research such things before deciding to purchase foreclosure homes. Your financial status should be in good standing before closing the home buying process.

• Click here to return to FAQs page
• Click here to begin your search