Understanding Real Estate Owned (REO) Properties

Real estate owned properties (REOs) are foreclosed properties that are owned by a bank. Why are these properties owned by banks?

1) Because the homeowner was unable to pay off the mortgage.

2) Because the property failed to sell at a foreclosure auction.

Central Florida REOs are attractive to for several reasons. One of the most important advantages is that all of the home’s liens (property-related debts) are removed once it becomes an REO, and all of the property's taxes are paid in full.

Some Wonderful Advantages to Buying an REO

•    REOs can and should be inspected prior to signing a contract.
•    The lending bank will always restore the REO to at least stable condition.
•    The bank lender will often offer an allowance for certain repairs to the home.
•    Most REOs will include appliances.

All REOs will either be sold by the bank itself or through an established broker. As a result, buying an REO requires a specific body of knowledge and expertise. Make sure you find a real estate agent with REO experience.

Since REOs have been passed up at a foreclosure auction, and they are typically in need of some repair, they may be purchased at an extremely low price.

The Central Florida real estate market is home to a variety of real estate owned properties. Whether you're a family looking for an inexpensive gateway into home ownership, or you're an investor looking to flip a home, REOs deserve your attention.

For more information, check out the U.S. Department of Housing and Urban Development.