Understanding Real Estate Owned (REO) Properties

March 26, 2010 by · Leave a Comment 

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.

About Mike

Mid Florida Investment Properties, LLC owner Mike Calvert has been buying and selling real estate in Central Florida for over 18 years. Get a seasoned investor as your partner for a fraction of the profit. We handle the transaction from start to finish!

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