Everyone is well aware that Miami Beach real estate has improved in affordability and while we would probably be better off without the number of bank owned property and foreclosures, their abundance offers a wide variety of buying opportunities. In this article, we’ll explore REO (real estate owned) properties and how they differ from foreclosures.
An REO is essentially a foreclosure up until the point it’s sold at a Miami Beach real estate auction and fails to find a buyer, in which case the foreclosure becomes an REO property and returns to the hands of the lender which in most cases is the bank. Banks weren’t really designed to take on the role of proprietor; the majority of them greet potential REO buyers with open arms which can often lead to lots of flexibility on price. Keep in mind that an REO isn’t exactly the financial loss like that of a foreclosure so be aware that banks will not sell an REO at a loss.
Generally speaking, foreclosures can carry some potential liabilities like unpaid taxes, for example. In a Miami Beach real estate REO scenario, these situations happen very rarely since lenders will pay off these fees before the property is sold to the new homeowner. Conversely, you’ll still have to deal with the actual condition of the REO in question which could be great, terrible, or somewhere in between so strongly consider a home inspection report.
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