Foreclosure: When an owner cannot continue paying the mortgage.  The Banks Trustee, the one named in the deed of trust, moves to make its claim on the deed: to get the owners name removed and the Banks name as owner.

After Foreclosure: Buying bank owned properties. There is a lot of interest in buying bank owned properties these days. A lot of information, some good and some bad, is floating around about the subject.

What’s an REO?
REO stands for “Real Estate Owned”.  These are properties that have gone through foreclosure and are now owned by the bank.  This is not the same as a property up for foreclosure auction or short sale.  A REO, by contrast, is a much “cleaner” and attractive transaction.  The bank now owns it.  The bank will see to the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.  Do be aware that REO’s may be exempt from normal disclosure requirements.

It’s commonly assumed that any REO must be a bargain and an opportunity for easy money.  This simply isn’t true. When considering the value of a REO, you need to look closely at comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale.  Some Banks do not offer customer service in a timely manner, so be very prepared to do business with an industry that will keep you uninformed during the processing of your offer. Read my blog for more on the short sale.  And click Short Sale also for more....