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.