Types and Stages of Foreclosure homes:

3. Real Estate Owned (REO) Properties

What is a REO?

REOs, also known as bank foreclosure homes, occur when an owner fails to make payments owed on a mortgage. The lender is then able to purchase the property back at a foreclosure auction.

How do I find REOs?

You can find REO property the same way you would when searching for foreclosure homes. We advise you to establish a relationship with lenders and local realtors who manage REOs that are available for sale. Another easy way to find REO properties is through word of mouth.

How can I purchase REOs?

Purchasing REO property is a simple process and not as complicated as many may think. Simply submit a written contract to the lender's broker or to the lender. Make sure to inform yourself of everything about the foreclosure home before planning to purchase them.

How much money do I need to purchase REO homes?

The amount of the deposit varies, depending on the amount the lender states and the actual value of the property. Such prices can range from $500 to as much as $5,000, sometimes even more. The final price will be determined once you submit your offer. Once the date, price and terms, are settled you are required to locate 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 loans. Some lenders rather not provide loans to homebuyers, as other may not offer loans to investors. Make sure to research these things before you purchase a foreclosure property. Also, make sure your financial status is in good standing before closing the home buying process.