The simple answer is it stands for Real Estate Owned and the one thing banks do not want is real estate, especially the residential kind. Once a homeowner can or will no longer make payments on their home loan the lender can seize and sell the property as stated in their mortgage contract. Once the foreclosure process is complete the home is considered Real Estate Owned by the lender. This is usually when a lender attempts to auction the home for the outstanding loan balance, accrued interest and other associated fees;However, if you have seen the real estate market many lenders are skipping the action step of the process.

With the large number of listings in Northern Va. including REO's on the market many lenders are placing these homes directly on the market. They are usually listing them with agents in the area in an attempt to get them sold for as much possible. These listings are not always the best deals on the market since the lender wants to sell and get as much of its money back as possible. I have seen many of these listings overpriced and in bad shape since the previous owners left on bad terms. For those of you who think they are all a good deal please do your research before you purchase on of these homes. Even better yet hire a real estate agent to do the research for you and knows the market and make sure its a good buy.

Please do not ignore all the other listings on the market when on a home search for a great REO deal. With the large numbers of listings on the market there are good deals to be had with short sales, relocation's and just plain listings. Make sure you see all relevant listings on the market when purchasing a home. The one thing you can count on with an REO is the lender will most likely continue to lower the price until a home is sold. Most REO's are owned by banks and they are not in the business of owning real estate and want to move the properties they have foreclosed on. This is why many of these homes are sold "AS IS" and will not allow for a home inspection after a buyer has made an offer.

The one most important piece of advice I could give if you are purchasing and REO is Be Patient. The process of purchasing one of these homes is much slower since there are more steps and approvals involved. This again is why a good real estate agent should be on your side to help in the buying process. Good luck and good hunting.

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