Real estate owned properties or REO properties are the houses that have fallen under the ownership of a mortgage lender or investor after the property owner has failed to make the principal and/or interest payments on a loan. Such properties may be found through websites and auctions, REO banks, and real estate brokerages. Investors buy REO properties because they are usually offered at discounted prices due to the fact that they are being sold in ‘as is’ condition. REO properties can be easily found browsing online but they do require some research before purchasing them.
1. Online REO Directories
REO sites and auction sites list REO properties for sale from coast to coast. They offer different sales formats such as an auction, contacting a real estate agent, or bidding directly on the site. Some of these sites also include lists of properties in various other stages of foreclosure.
2. Real Estate Broker
A real estate broker helps investors find REO properties. Real estate brokers provide property listings with information that isn’t always public. They know how much the house was last sold for and what mortgage company foreclosed on it. They have been inside the property so can give an accurate description of its current condition.
3. REO Banks & Government Loan Insurers
Once you have searched for REO properties using online directories and/or real estate brokers, you may want to search on REO Banks and Government Loan Insurer sites. These sites feature their own REO listings, however, they don’t list foreclosures and they don’t offer as much detailed property information as the REO directories and real estate brokers do.
Next Steps After Finding an REO Property
- Contact a Listing Agent – Make sure all your questions are answered by an agent or property representative.
- Schedule a Walk-Through – Examine the property in person to see if you’re still interested since there may be discrepancies between online info and the house’s current condition.
- Schedule a Home Inspection – The seller won’t be making any repairs but it’s important to know what needs to be fixed right away and if there are any serious issues.
- Schedule an Appraisal – This will tell you what the home is worth.
- Keep Your Budget in Mind – Make sure you are still in line with your budget after you find out the results of the property inspection and appraisal.
- Write an Offer – If everything is in order, have your real estate agent draw up an offer on the REO property; this may be done online or in an auction format
Buying REO properties requires patience, skill, and more than a little bit of determination. That’s because there is only one answer to the “where to find REO deals” conundrum: wherever you can.