So you may have heard of this term called REO, or Real Estate Owned, property. These are properties that are now owned by the lender, usually a bank, government loan insurer or government agency. The reason these homes are lender owned is because they tried to sell the home at a foreclosure auction and no one bought it.
The reason the REO home did not sell usually has to do with the fact that the defaulted loan or loans has a higher value than the property itself, so no one bids on it. Because of this, the bank or lender is forced to take possession of the property, and then it becomes an REO.
So now you may also be wondering how to buy REO properties from a bank, and we do not blame you. Bank owned properties for sale are the perfect way to get a stellar deal on a home that would normally be out of your price range.
If you are buying REO homes, short sales are the way to go. The reason being is a short sale home is priced lower than the total amount due to the lender, but since the transaction closes so quickly, and before the lender has had time to foreclose, you can usually negotiate a really good deal between the current home owner and the lender.
The only slight downside is that foreclosure homes are typically listed in as is condition, which means you get what comes with the house, regardless of what kind of problem it may be. In many cases though, the cheap price outweighs any problems that might need to be fixed inside the home.
Nowadays, many Realtors are able to help with short sales and foreclosures, especially since 2009 when the National Association of Realtors introduced a certification program for short sales and foreclosures.
If you want to know how to buy REO properties from a bank, just ask a Realtor or do an online search for a bank owned property listing.