Real estate owned is commonly referred to as an REO or bank owned property in the foreclosure market. After an unsuccessful auction, the lender will try to recoup some of its losses by trying sell the property either through another auction or through a realtor. To make the listing more enticing, the bank will generally remove some of the liens and other expenses on the property.
Generally speaking, real estate owned properties are in poor shape and, with some exceptions, are sold "as is." These make them ideal for real estate investors, because the low price can more than compensate for the condition of the property. Consider the following suggestions when forming your real estate owned list of properties:
1. Review real estate owned listings in your area.
2. Hire a home inspector with an REO background to help identify renovation and repair costs.
3. Find a real estate owned provider or broker to assist you with your purchase.
Find real estate owned listings in your areaFirst and foremost it is important to take a cursory look at the REO listings in the area you are considering. This allows you to review preliminary real estate owned information to rule out some properties and put others on your short list, based on your knowledge of the area.
Hire a real estate owned home inspector to help calculate repair and renovation costsDo your homework before making an offer by calculating the costs of repairs and renovation, including the time to complete them. A home inspector with an REO background can help identify what repairs need to take place. A real estate owned property is only a bargain if you don't end up sinking too much cash into it.
Find a real estate owned provider or broker to assist you with your purchaseAn REO transaction can be much more complicated than a traditional home sale. Consider hiring an REO provider or broker to help guide you through the process. Their expertise can help you avoid pitfalls and ultimately help you negotiate the best deal possible.
- If you are a licensed real estate agent and are interested in entering the business of selling and listing real estate owned properties, you are in demand. There are many real estate firms looking to employ agents interested in this growing, yet challenging, field.