Foreclosures (REO’s)REO’s are foreclosed properties owned by a Bank, a US government mortgage guarantor like Fannie Mae or Freddie Mac, or investors that buy repossessed properties out of bankruptcy. If you are looking to buy an REO, we will help you find it. We expect to see continuing pressure on homeowners in financial distress who will have to sell their homes. These sales could take the form of regular sales, short sales, or REO’s, depending on the specific type of property and its location. These types of sales will be commonplace until the general economy improves and unemployment declines.
The legal process used by a lender to seize property of a homeowner, usually due to the homeowner not making timely payments on the mortgage, is called foreclosure. The house is being sold to satisfy the debt to the mortgage holder who now owns the foreclosed property. Typically, there is less uncertainty in buying a foreclosed property or REO, and the process can go quickly. The Bank which now owns the property will have an agreement with an agent who becomes the “listing agent.” To buy a home in foreclosure, your agent (buyer’s agent) will present your offer, along with the requisite REO forms, to this listing agent, who then presents it to the Bank.
You will be buying this type of property essentially AS IS, and you may not receive all of the typical Disclosure Documents that are associated with a standard sale, as you are dealing with a Bank that has no first hand information on the property and may not even be located in the region.