REO homes are Real Estate Owned Homes or a property owned by banks because the original owner defaulted on mortgage payments. REO homes are a great opportunity for investors as they sell at deep discounts.
REO homes are sold by banks with the objective of recouping most of the investment made by the bank on the property. The property is usually one which has been associated with a default on mortgage payments followed by failure to sell at foreclosure auction. An investor is able to make a cheap as well as safe and sound investment.
REO homes are sometimes offered for sale at a second auction. During this process, the bank is interested in recovering all the money that was invested in the property that was made in the original mortgage. Also included are any costs of foreclosure in the opening bid at the auction. An announcement is made about the date and time of the auction to the general public. Any investor who matches the credit qualifications is allowed to bid for the REO homes on auction.
Buying REO homes is an excellent way to buying a first home at a nominal price. Customers with good credit or liquid capital who close the deal with no delays can make substantial savings. There are people who wish to make a series of rental properties and they often invest in REO homes in order to extend their rental business and offer homes in good neighborhoods.
It is not necessary that an REO home has to be sold at an auction. Listings of foreclosures are maintained by many financial institutions and are offered directly for sale to eligible buyers. Hence it is useful for investors interested in REO homes to talk to banks with regard to listings of foreclosures held by them. Also available are listings with businesses that monitor foreclosure activity to cater to land speculators and others in the real estate business. The information is provided for a fixed fee or a percentage of the finalized deal.
Where to find REO homes listings? Many banks and lending agencies provide free information of their REO listings. Some of these are listings of Bank Of America, Chase Bank, Wells Fargo, Citi Group etc. Listings are also available with government sponsored mortgage giants Fannie Mae and US Home Mortgage.
Some of the advantages in buying REO homes are that the bank is willing to sell at a low price as it is eager to get rid of the property. Also all liens against the property are removed once it becomes an REO and it does not have any taxes outstanding. REO homes are also restored to livable condition by the bank Banks also offer good options for financing as compared to buying the traditional properties. Thus REO homes are a great opportunity for investors to buy a good piece of property.