| Home buyers are frequently looking for a good deal | | | | are then motivated to turn the property into a real |
| on a house. Whether they are upgrading, investing or | | | | estate owned property and sell it at a later date. |
| buying their first homes, those in the market for real | | | | Typically, REO properties go for up to 20 percent of |
| estate know that foreclosed and real estate owned | | | | their current market value. Prior to purchase, buyers |
| (REO) properties provide the prospect to get a good | | | | need to examine the property and comparable |
| deal on a home. They are not the same type of | | | | properties in the district to make sure they are getting |
| property, however. Real estate owned property is | | | | a good price. |
| property that the bank has repossessed from a | | | | A REO sale is considered one of the safest types of |
| distressed homeowner and either decided not to sell | | | | real estate deals, since the seller is a bank, not an |
| through foreclosure or failed to find a buyer for at a | | | | individual. Unlike foreclosures, REO homes do not carry |
| foreclosure auction. The lender then sells the house as | | | | the added weight of liens or back taxes that the new |
| its new owner outside of the foreclosure course. A | | | | owner will be responsible to pay. Also, buyers can see |
| foreclosure, on the other hand, is a property that is | | | | REO properties before purchasing them, bargain on |
| being sold to pay the balance the homeowner owes. | | | | the price to accommodate the need for repairs and |
| Each state deals with foreclosure sales uniquely, but | | | | still get the home for a great deal in many instances. |
| these properties are typically sold at auction to the the | | | | On the other hand, buying a foreclosure sometimes |
| entity that places the highest bid. The starting bid at a | | | | represents a solid investment, because the home's |
| foreclosure auction incorporates all that is to be paid | | | | current owner may wish to reside in the home as a |
| on the property, the accrued interest, and the attorney | | | | renter. This means the home comes with tenants, |
| bill associated with the sale. | | | | allowing its new owner to start making money right |
| Distressed homeowners usually face other types of | | | | away. When purchasing a foreclosure at auction, the |
| financial challenges outside their failure to pay their | | | | buyer will conclude that the bank that handles the loan |
| mortgages. Often they will add to the amount of debt | | | | on the property is more than willing to speed up the |
| they have on the home in order to try to fix their | | | | financing process in order to discharge the burden of |
| problems. They also frequently owe unpaid taxes on | | | | the home. If a home does not have a lot of debt |
| the home by the time it winds up in foreclosure. For | | | | against it, buying it through a foreclosure auction offers |
| this reason, the beginning bid at a foreclosure auction | | | | the best chance to get a good deal. The vital aspect is |
| may be more than the property is estimated to be | | | | researching what is owed on the home before bidding |
| worth, which causes many auctions to be | | | | at an auction if you are looking to find a good deal. |
| unsuccessful in bringing in a winning bidder. The banks | | | | |