What is an REO?
REO or OREO is an acronym for Real Estate Owned or Other Real Estate Owned and is industry jargon for foreclosure property repossessed by banks or lenders. These are properties that have gone through the foreclosure process without a successful sale and are now reverted back to the bank or lender. Now the mortgage loan no longer exists and the lender has the burden of listing the property for sale.

Do Banks list their own property?
Not typically. The majority of the time an Asset Manager is placed in charge of the disposition of the property. Their goal is to get the highest amount in the SHORTEST amount of time.

Will the bank take a low ball offer?
Not typically! Banks hire experienced Real Estate Agents and/or Asset Managers to properly price the property so it is positioned to sell.

If my offer is the highest does that mean the bank has to accept my offer?
NO… There are a lot of factors that go into the offer and acceptance of a bank owned property. If your offer has a financing contingency and another offer that is less than yours is a cash offer with no contingencies chances are the bank will accept the lower price. Remember the bank wants to sell this property for the highest price in the SHORTEST amount of time.

Will the bank make repairs?
The majority of the time the Bank has made all the improvements they intended to before they place the home on the open market with a Realtor. REO properties are purchased “as is”.

What does “as is” mean?
This means you are buying the home as is, where is, with all faults. If the home has a leaky roof that you discover after closing you cannot go back and sue the bank.

Since REO properties are typically purchased “as is” does that mean I can’t get a home inspection?
No, the Bank’s will allow inspections however they are on much shorter time restrictions than an individual seller. Also if you fail to have inspection done in the time frame allotted you have forfeited the right to cancel the contract under that contingency.

Do all bank owned properties need a lot of fixing up?
No, most are in good condition and just need minor regular maintenance.  A lot of them are even in “move in” condition.

Are REO’s or Bank Owned homes more difficult to buy?
NO… Bank owned property is a much cleaner and attractive transaction. The property has been cleared of all liens, encumbrances, outstanding taxes and other items that could affect you having clear title to the property. Banks are not emotionally attached to the property – Make a fair offer and the property is yours!  Banks are not in the real estate or rental business.