As long as there are defaulting borrowers, there will be REO foreclosures waiting for people to take them away from a bank's hand
. These homes are non-performing bank assets and banks are really keen on unloading them to buyers. These homes are compiled in a list given to brokers or listed in online foreclosure listings services.
REO foreclosures provide opportunities for every American family or individual to own property. These properties are also ideal for property investors looking for lower priced homes to refurbish and resell. There are some qualities that are unique to bank owned homes so it is always prudent to get to know more about this type of foreclosure before purchasing them.
Elements of REO Foreclosures
REO foreclosures are properties that have become bank property by virtue of a failed auction. The formers of these homes have been foreclosed on after failing to meet mortgage obligations, typically for three consecutive months. Once the foreclosure has been made final, the property is then offered to the open market through an auction. If a bidder wins a home auction they pay for the entire amount of their winning bid either instantly or over a short period of time.
This is probably the reason why properties offered in a auction sometimes revert to banks and become REO foreclosures where they can be purchased through a financing plan that are sometimes even offered by the same bank selling the property. Among the many advantages of purchasing REO foreclosures is the significantly discounted price since banks primarily want to recover the unpaid portion of the mortgage and probably some additional costs in maintaining the property. Some banks, especially those with a high inventory of REO homes take pains in ensuring that the homes are attractive enough to increase their sale potential. Banks would normally throw in a basic pest certification and a title insurance to the price package. They will also take charge of the eviction process. Individuals and investors alike can appreciate these perks that they can only enjoy with bank owned homes.