What is REO?
08/17/2008 - By REO All Stars As defined by WIKIPEDIA:
“Real estate owned or REO is a class of property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auctionThis is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank. The minimum bid in most foreclosure auctions equals the outstanding loan amount, the accrued interest and any costs associated with the foreclosure sale including attorneys' fees. After an unsuccessful auction, the bank will go through the process of trying to sell the property on its own. It will remove some of the liens and other expenses on the home and try to resell it to the public, either through future auctions or direct marketing through a Realtor. Generally speaking, bank REO properties are in poor shape in terms of repairs and maintenance; however, real estate investors will often go after these properties as banks are not in the business of owning homes and so, in some cases, the low price can more than compensate for the condition of the property.” This depiction typically holds true and WIKIPEDIA has done a good job of describing the lifecycle of an REO property in a nutshell. As an agent it is our job to know the intricacies and differences of an REO property versus a typical retail property. If you have been at this long enough this is old hat for you. Those new to REO must learn all you can before accepting your first REO listing. One suggestion would be using the internet and specifically the REO forums that are out there, they hold plenty of good info for the new REO agent. In summary – If REO is your business, make sure to get out and learn all you can. Start networking with other REO professionals and never give up. This is a tough business to get started with, although the rewards are well worth it!