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For novice home buyers and investors, buying real estate owned property (REO) from the lender is the safest way to buy.
There's no risk. There are no taxes, no liens to worry about and no tenants to evict. Buying an REO is the most popular
method of buying homes in foreclosure.
* REO Real Estate Owned Property...
Real Estate Owned (REO) Properties are probably the safest way to buy a home and most banks with a list of
REO's can be very motivated sellers.
Benefits of buying real estate owned property:
- Savings up to 20% off home market values
- The bank or lender is a motivated seller
- Easiest way for beginners and experienced investors to buy properties
- Interested buyers have instant access to properties for inspections
- No back taxes or liens to worry about - No tenants to evict
- Redemption period for original foreclosed owner is over
- Price negotiable around rehab costs, interest, closing points, loan amount, etc.
- 99.99% risk-free - bank always provides good, clear title
- Lower than usual downpayment & below market rates possible
...here are some deals a lender may offer on
bank owned REO properties.
REO Properties Have Motivated Sellers
If a foreclosed home or property does not bring enough proceeds from an auction sale to satisfy debts on a
defaulted loan, it is taken back by the lender and becomes an REO (real estate owned) property.
From a lender's point of view, these properties are non-performing assets that do not generate income.
Since a bank is in the money business (not the real estate business), it wants to sell these properties as fast
as possible. There are also multiple federal agencies monitoring the performance of all lending institutions, making
sure non-performing assets (REOS) are kept to a minimum and that banks remain profitable.
Bad investments create non-performing assets and since bank stocks are traded, there are shareholders that
bank managers are held accountable to. A bad balance sheet, or an indication of financial mis-management, can
cause tremendous hardships for a bank, especially if shareholders decide to take action. This is yet one more reason
why lenders are motivated to sell real estate owned (REO) properties quickly.
REO Properties Cost A Bank Money
Once a bank has foreclosed and takes possession of a property, it has entered into a dual loss situation. The double
loss results from a lack of income from the property (loan interest), as well as other expenses incurred while holding
it. Property taxes must be paid and a REO home has to be maintained so that it doesn't decline into disrepair.
Maintenance and upkeep can be costly for a bank, especially if their REO properties are outside the bank's normal
business area. In such case, a bank will most likely contract with an out-of-town management or maintenance company
to provide landscaping, snow removal, or other services. Banks with larger inventories of REOs often have entire
departments dedicated to management and sale of these properties. This can get very expensive for a
bank...thus the lender is definitely a motivated seller.
Buying Real Estate Owned Properties Is Easy!
Steve Maletos has put together a simple,
step-by-step plan that anyone can read, follow and implement to save thousands on their
next home or property purchase. Join the many who have saved (and made) money buying REO real estate owned foreclosure properties.
For complete information on how to purchase Real Estate Owned Properties, pick up a copy of the # 1 eBook Guide,
"Fast Cash in Real Estate Foreclosures."
Affordable, this downloadable ebook is packed with facts on everything you need to know
for creating profit from real estate owned property and REO foreclosures.
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