Real estate owned or REO is a class of property owned by a lender, typically a bank, government agency, or government loan insurer, after an unsuccessful sale at a foreclosure auction. If you are interested in buying REO homes or are looking into how to buy REO property, then here are a few facts that you should know first.
1. Bank owned commercial properties can be great opportunities for those looking to invest. It can be one of the few ways that someone new to the game can break into the Reo foreclosure listings because they are often being sold for at least 30 to 40 percent below the market value.
2. Once an investor has figured out how to buy reo property, they can benefit tremendously by fixing it up the previously bank owned REO properties at minimal cost and turning it over for sale at a generous profit.
3. Banks often list foreclosed properties for sale on an as is basis that they are able to sell them as quickly as possible. This way they are able to cut down on back log and the cost it would be to fix up the houses before selling them.
4. Between the years 2008 and 2011, as many as one third of home sales were distressed sales. This means that they were previously foreclosed and not sold by the original owner.
5. As a way to get ahead of selling all the homes that have been foreclosed on in the past few years, the National Association of Realtors introduced a Short Sale and Foreclosure Certification Program in 2009.