4 BD / 3.5 BH
GA 30331
Find foreclosed homes up to 60% below market value
If you are like most people, then you more than likely have asked yourself “What is REO or “What does REO homes mean?” The most basic REO definition is as follows:
"REO properties are homes that have been foreclosed upon, but were not sold at auction and therefore become the property of the lender, which is frequently a bank."
Put simply, an REO homes definition involves who now owns a specific foreclosed home well after foreclosure.
When a homeowner becomes seriously delinquent on mortgage payments, the lender will often file a notice of foreclosure. The homeowner has until a specified date to become up-to-date on mortgage payments - this date is often the date in which the house is scheduled to be auctioned to the public. If the lender is unable to fulfill these requirements, repossession occurs and the home is sent to auction. The lender places an opening bid at the auction and unless that opening bid is surpassed, the property becomes bank owned. These bank REO properties are then the complete responsibility of the lender, who typically sells these properties to the general public.
REO foreclosure properties can often be obtained below market value since the lender is looking to part with the property in an effort to no longer be responsible for property maintenance, while also looking to recoup some of their loses. Therefore, you can sometimes find bank REO properties for sale cheap. However, not every property in a REO sale will be discounted. It is essential that you search REO listings and view the property in person and find the best deals on the market.
If you are looking to buy REO properties, you may wonder if you need to have cash in hand when buying REO properties. The answer is no. You can obtain REO financing from many lenders for your REO purchase. The statement that you must pay in cash is simply a myth.
When you are looking to purchase foreclosures, including REO homes, it is important to understand that these properties often require some minor to moderate repairs. More often than not, these are only minor repairs such as painting, carpet replacement, and appliance installation - typically renovations that you will find when you purchase most discounted properties. Fortunately, you can often finance your purchase to include the REO repair. There are even home repair grants that can be obtained through some lenders to help cover the cost of some of the repairs.
If you are wondering how to make an offer on a REO property, then rest assured that you are not alone. Most people are uncertain of how to make offers on REO homes and how that process differs from sending an offer letter for other properties. Fortunately, the process is the same for making an offer on bank REO homes for sale as it is for other homes on the market.
Below are four steps for making an offer on bank owned homes:
It is essential to note that if you do not plan on taking out a home loan - even for HUD REOs - you will need to provide proof of cash funds. Similarly, if you are looking to purchase the REO with the equity on your current mortgage, you will need to prove that you have a sufficient home equity loan to cover the amount of your offer.
The specific amount of time it takes before you receive a response to your REO offer can vary greatly depending upon the current real estate market. However, as a general rule of thumb, it can take up to a couple of weeks in a normal market before you hear back from the lender in regards to REO foreclosed homes. When you do hear back, you may receive a counter offer, which could increase the time it takes from your original offer to purchase for your particular REO foreclosure listings. Different banks may have different standards and timelines; for example, the length of time it takes for a response in regards to Chase REO properties may be different from properties owned by Wells Fargo.