True Definition of a Bank Owned Home or commonly referred to as an REO
There is some uncertainty about what is meant by Lender Owned, Bank Owned, REO properties, First of all it is all pertaining to the same thing.
So here is a True Definition of a Bank Owned or REO from A Licensed Loan Officer and added content from a Licensed Real Estate Agent.
An REO (Real Estate Owned) is a Home that has been Foreclosed on, went to Auction and did NOT get Purchased, weather the opening bid was too high, or lack of interest, or lack of knowing, either way Lender Owned Homes, Bank Owned Homes, Real Estate Owned all means simply that.
Now the Real Question is: How does one consider these specific properties for Purchase as to the advantages or disadvantages these properties may have.
Well here are some Advantages for the Buyer:
- All REOs are Vacant: At least they should be, so this eliminates much time and frustration trying to schedule showings with picky sellers and unavailable Listing Agents-Had to bring that up, because all too often they are unavailable to answer questions you have, or coordinate with the Sellers to set up Showings, Hence the Value of Having A Good Buyers Agent Represent you when your Looking for Homes, But that's a whole other story.
- REOs are typically Priced Reasonably:Now before anyone gets all uppity, I'm aware that some Price tags are a bit ridiculous and end up decreasing substantially after only 30 Days on the Market, although, these homes have however been through a BPO (Broker Price Opinion) Process, which is similar, although not nearly as in-depth as an Appraisal, but it still establishes Value and gives a much better Estimate as opposed to what the seller thinks it worth.
- Buying a REO is Typically a Quick & Smooth Transaction:Being that the Bank has already Agreed on what they will take for the Home it takes a lot of wait time & Frustration out of the Equation, making for a more straight forward transaction, and to that point, ask a Realtor about how fast REOs move, no sooner than you view the Home and clients decide to place an offer its Already Under Contract. Click to View Full Story Here
- REOs Typically Offer Great Incentives for Buyers:More Often than not, You have the Bank Offering 3% toward Buyer Closing Costs, Perhaps A Home Warranty, sometimes even New Appliances, or Great Financing Incentives offering lower down Payments with No Monthly Mortgage Insurance.
I hope these points can help you navigate your way through terms & verbiage used in the Real Estate Industry, and give you a much better, more educated transaction, as always I am Available 7 Days a week if you Feel you would like to discuss these matters over the Phone or in Person