What it is:
Real Estate Owned (REO) is a designation given to properties which are owned by a lender due to an unsuccessful foreclosure sale at auction.
What does that mean to a buyer?
REO properties can sometimes present an opportunity to be purchased for below market value as most banks would prefer to reinvest the proceeds, rather than waste time marketing the property for an extended period.
Additionally, the bank will often market the property "as-is" meaning they are unwilling to make any repairs to the property, which can make financing tricky.
What to know:
-Like short sales, the bank’s process of evaluating offers tends to take much more time than in a standard sale; As such there is the possibility of investing time and effort into the property, only to have your offer rejected at a later stage.
-While there is the potential to get a good deal with REO properties, standard sales tend to be the best options for our buyers.