2.7 min read
How Can I Buy an REO Property?
It's a question that every savvy real estate investor has asked from time to time. Why an REO property?
Why Can REO Properties Be Lucrative?
REO properties have the same appeal that pre-foreclosure properties have: You can buy them at bargain-bin prices.
REOs are just a further step in the foreclosure process -- really, they're the last step. After a foreclosed property fails to sell at auction, the bank will hire realtors to market that property as an "REO," which is short for "real estate owned." The bank wants to sell these properties ASAP since they're in the business of lending money, not managing real estate.
So, in short, REO properties can be lucrative because you can expect to pay much less than what they previously sold for.
The catch, though, is that they're almost always going to need some level of repair.
If you're searching, "How Can I Buy an REO Property?" where do you go to look?
Best Sources to Find REO Properties
Sometimes REO properties aren't even listed as REO on Zillow or MLS. Some realtors think they can attract more interest to the properties by listing them regularly. However, certain realtors specialize in REO properties. These realtors are typically in contact with the banks, so if you can find someone with the proper amount of experience, you can start to develop a killer team that will help you find deals.
Mostly, though, we recommend you check out the following resources when you're looking for REO properties:
- Your local County Clerk's office. Look for a "Notice of Default" or a "Notice of Sale." Depending on the county you live in, sometimes, these websites can be somewhat demanding and challenging to navigate. Call up the Clerk's Office and see if you can get someone to point you in the right direction.
- The Department of Housing and Urban Development's search.
- Any other government agency's website (like the FDIC, IRS, and VA).
- Straight to the banks themselves. Sometimes, the banks will list bank owned properties on their websites to cut out the middlemen.
Another tip is to get pre-approved for a mortgage. This way, the bank will know that you're serious about buying a property -- and not just clicking around, looking at houses because you're bored.
Conclusion: "How Can I Buy an REO Property?"
REO stands for "real estate owned." It's the last step in the foreclosure process after the bank foreclosed upon a home and failed to sell at auction. It has the same qualities as a pre-foreclosure or foreclosure, though you can typically buy it at a discounted price.
However, it's going to need repairs. You should know that going into it.