Ever wonder why all those foreclosed homes seldom show up in MLS propriety searches on agent websites? Obviously, when homes are foreclosed, they are not zapped out of existence. They continue to blight our neighborhoods, so where are they?

Up to this point, banks have reclaimed ownership of the properties; they try to sell properties at auction, but if that is not successful, the homes become part of the banks' inventory and are then considered Real Estate Owned (REO) properties. Investors who are willing to take them "as is" often try to negotiate with the bank for a below-market value price.

In some cases, banks used realtors, but since they were already taking a loss, they shied away from paying commissions which would increase their loss. As a result, FDIC-insured banks currently have $23 billion in REO property on their books and under the radar of the MLS. Three quarters of the inventory is held by very large banks with assets greater than $10 million. About that same percentage evades the MLS.

This process has made REO homes inaccessible to the average home buyer who is seeking a nice place to live with his family. Buying an REO home was complicated and took too long.  Now faced with new pressures to modify loans of current borrowers and remain stable, banks are likely to release much of their REO inventory into the market this year through realtors.  That is good news for buyers.

The new crop of REOs on the market give prospective home owners even more choices in this "buyers' market." REO homes often need a little work but tend to be good values. They can offer a buyer the layout and amenities he wants in a neighborhood he might not have previously considered.

Though many lenders will still turn to auction to save commissions, more REO properties are likely to be turned over to realtors who have acquired experience in this specialized area.  This is in line with the President's goals of making affordable housing accessible for families. Selling to individuals through a realtor may be the best way to accomplish this goal.

If buying an REO home sounds like a good deal to you, give us a call. Yonas Woldu and Nebi Adhanom have the experience to help you find your ideal property in Las Vegas. Check our out Vegas Real Property website for more information.