Bank owned properties, commonly referred to as REO’s (or real estate owned properties) are properties taken in to a bank’s inventory after a homeowner fails to make mortgage payments and a foreclosure sale results.
These homes are typically sold in “as is” condition – and, in most cases, banks list these properties for sale through local Realtors.
REO homes are attractive to buyers because they are usually offered at discounted prices that are often lower than current market value. Additionally, the properties are normally vacant, so showings can be arranged on short notice.
Before making an offer on a REO, consider hiring a licensed home inspector to give you an estimate of any repairs that you might need to make… and keep in mind that most banks will not provide financing on their own REOs.
If you choose to make an offer, keep your offer as “contingency free” as possible since you will probably be in competition with other buyers for these types of properties.
