REO - Real Estate Owned
A REO is a property owned by a beneficiary, usually a bank, after the foreclosure process. The foreclosure process will vary from state to state, however, if the property is not sold at auction the beneficiary can legally repossess the property and hence it is given the term REO.
Properties in this category are generally well priced, however, their condition may be very poor. While in the foreclosure process the property may have been abandoned and or vandalized. This results in a home in need of repairs and other maintenance. The level of repairs required may impede a buyers ability to secure a loan on the property and therefore there is increased competition from cash buyers who can purchase the property “as is” to rehabilitate and sometimes but back on the market for re-sale.
As the Real Estate market has become saturated with REO, overall properties values have dropped causing equity sellers (home owners who have equity in their property) to lower their home price in order to remain competitive. In some cases the value deferential is so great that a homes current value is less then the loan amount on it, therefore, resulting in a short sale.
There are many opportunities in the REO market; however, today’s buyers do not only need to look at REO’s for savings.
Fore more information on REO’s contact L.A Metro Home for a one on one consultation Contact Us.
