What Is Foreclosure And REO?

What Is Foreclosure?

Foreclosure happens when a homeowner can’t pay their mortgage. The bank then takes the house back because the homeowner did not pay on time.

The bank will try to sell the house to get back the money they loaned. Buying a foreclosed home can be cheaper, but the home might need repairs or have problems.

 

What Is an REO Home?

You will hear the term REO a lot when talking about foreclosures.

REO means Real Estate Owned. This means the house has already gone through foreclosure and the bank owns the home now.

When the bank takes back the house and cannot sell it at auction, the house becomes an REO.

 

What Does an REO Home Look Like?

REO homes can be different:

• Move-in Ready: Some REO homes are in good shape. You could buy the home and move in quickly because it doesn’t need many repairs.
   
• Needs Repairs: Many REO homes need fixing. Maybe the house was empty or not taken care of well. Some buyers or investors like to buy these homes because they can fix them up. These homes usually cost less because they need work.
   

 

How Is Buying an REO Home Different?

Buying an REO home is not the same as buying a foreclosure at an auction.

• REOs are listed by real estate agents, just like regular homes.
   
• You can use a mortgage to buy an REO home, not just cash like with auctions.
   
• You can usually do inspections and get a loan before buying, which makes it safer.
   

But banks usually sell REO homes “as-is.” This means the bank will not fix any problems. You must pay to fix the home if it needs repairs.

 

Where Can You Find REO Homes?

It can be hard to find REO homes because banks don’t always advertise them well. Many do not appear on popular real estate websites.

I have access to special websites and tools, like RealtyTrac, to help find REO homes for you. I can help you find homes that fit your needs.

 

Good Things About Buying an REO Home

Here are some good things about buying an REO:

• Lower Price: REO homes often cost less than normal homes. This can save you money.
   
• Mortgage Loans: You can usually get a mortgage to buy an REO.
   
• Inspections: You can have the home checked before you buy it.
   

 

Things to Watch Out For When Buying an REO Home

Here are some things to be careful about:

• Sold “As-Is”: The bank will not fix anything. You pay for all repairs.
   
• Slower Process: Buying an REO can take longer than buying a regular home. Banks may take time to answer and approve your offer.
   

 

How I Can Help You Buy Foreclosures and REOs

Buying foreclosures and REO homes can be tricky. But I’m here to help you:

• I know where to find the best foreclosure and REO homes.
   
• I can set up times for you to see the homes.
   
• I will find out important facts about each home for you.
   
• I will guide you through the buying process.
   

Just contact me, and I will make buying easier for you.