REO's, real estate owned homes, often referred to as foreclosures are a substantial part of the current listing inventory today. For buyers, there are some differences which make REO property attractive in some ways, unattractive in others. They are often priced competitively from the first day of listing. That makes them easy to identify for a cost-conscious buyer, which describes just about all buyers. It makes it so easy that everybody looking for a home finds a well priced foreclosure quickly. There are often multiple offers for competitively priced homes, and the competition often yields more than asking price.
REO property often has other characteristics. Sometimes the (smart) bank updates, repairs and paints the home, making it attractive to a buyer. Sometimes the bank does nothing beyond maybe removing the debris left behind by the former owner. There are often unreasonable conditions of sale demanded by banks. Sometimes the property is unheated, unventilated, un-air conditioned, which makes viewing the property a little unpleasant.
The one thing that almost all REO property does not have is clutter, and that's too bad for buyers with insight. Many traditional sales and many short sales of occupied homes are characteristically cluttered. Sellers are usually counseled by their listing agents to do all possible to remove clutter, and many seem to be hard of hearing. I have shown homes with bedrooms that could not be entered for lack of walking space, rooms with nothing but a path, and the not quite as extreme overly furnished rooms.
With all the vacant homes on the market, my clients don't have as much opportunity to make the only offer on a home that is full of stuff. Homes that look like storage lockers are almost always homes we can count on to seriously consider our low offer. Smart buyers know that the clutter is part of the seller and, like the seller, it will be gone before they move in.
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