What are REOs - Real Estate Owned?

 

 

• Buying an REO is similar to buying a short sale except the property is already owned by the lender.

   

• The property was acquired by the lender through a foreclosure action.

   

• Often lenders will sell repossessed homes for less than the past loan balance.

   

• Bank-owned properties are called REOs, meaning real estate owned by the lender.

Banks end up owning the property when nobody at the public auction bid enough to cover the amount owed against the property. REO homes are often considered the best way to buy a distressed property because the seller is already out of the picture. It's just the investor, the investor's agent, the bank and the bank's agent who are negotiating the transaction. Some REOs can be purchased directly from the lender.

For more information, seek the advice of a real estate lawyer.