REO stands for Real Estate Owned, the property is owned by the lender that holds the 1st mortgage after an unsuccessful foreclosure auction.

The advantages of buying a REO property:

  • The liens against the property are removed and the taxes are paid
  • REO’s are listed with specialized real estate agents
  • The lender will often provide an allowance for certain repairs

Here is what you may want to consider before making an offer:

  • Are there any inspection reports?
  • What work has the bank agreed to?
  • Is there a special “as is” form?
  • How long does it take for the lender to accept an offer?
  • How does your agent deliver the offer?

Offers are usually faxed to the lender. Provide the listing agent with a pre-qualification, or better yet, a pre-approval letter and buyer biography. Make your offer easy to accept.