This is the first in a short series to help you make an informed decision about whether or not to purchase an REO or Bank Owned Home.
First, a little education is necessary on exactly what an REO property is and how it got that way.
What is an REO? An abbreviation for Real Estate Owned most commonly used to describe properties acquired in foreclosure and owned by institutions (banks)
The REO Process - California has a non-judicial system to carry out a foreclosure of a deed of trust. That means that no court procedure is required for a lender to sell the property to satisfy the debt. Some states carry out a formal judicial process which tends to be lengthier, and frequently have a redemption period after the sale. Here in California, the judicial process is available, but rarely used. The following steps will outline what is all involved in a non- judicial foreclosure.
If there are no other bidders, then the institution or bank is
deeded the property by the Trustee and this results in a REO property.
Now, the bank has this property on it's books along with the hundreds of others they have acquired through foreclosure. The banks are not in the real estate business and do not want to be landlords, so they must dispose of these properties. The banks however are already taking huge, huge losses on these properties and so they do not wish to "give them away". They are realizing however that in many areas they are competing for a sale with other REO properties, so they must price them aggressively. For this reason, we are starting to see more and more REO listings priced 10-15% below the current market value.
Whether you are a first time homebuyer or an investor, there truly are good deals to be had right now in the Sacramento area. To get more information on how good the deals are currently in the Elk Grove area, make sure to read, Elk Grove is on Sale!
Stay tuned for part 2 of Tips on Buying REO Properties - How to Find REO Properties and part 3 - What do I do when I find an REO property?
And don't miss out on our Foreclosed Home Bus Tour on Saturday, February 23rd from 9 - 1.
And don't forget to visit our website at www.AllElkGroveHomes.com for a list of our REO properties.
Lori Mode and Bruce Durham, Keller Williams, Elk Grove
(916) 230-0371 or send email to Lori@ModeandDurhaM.com.
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