| When someone mentions the term "REO homes" they | | | | the foreclosure process. Usually the owner will have |
| are referring to real estate owned homes that are | | | | made arrangements to pay someone to check in on |
| usually in the hands of the financial institutions that | | | | the home and ensure that the most basic care was |
| made the initial loans for their purchase. Usually there | | | | provided. |
| are no longer any mortgages on the properties | | | | When you approach the bank or title holder on the |
| because they have been reclaimed by the bank or | | | | home to begin the process of making the purchase, |
| mortgage company. For example, a family that took a | | | | you may be unable to receive any sort of land survey, |
| mortgage from a local bank and then defaulted on that | | | | pest reports, inspections or other information that can |
| loan, thereby forcing the bank to foreclose, may be | | | | give you an accurate understanding of the home's |
| living in an REO property. | | | | current condition. This is information that will have to be |
| As anyone in the modern economy will know, there | | | | obtained via professional inspections or reporting |
| are an ever increasing number of REO homes | | | | agencies. |
| because of the fallout from the collapse of the | | | | In addition to a willingness to buy the home "as is" and |
| subprime market and the resulting global financial woes. | | | | to pay for any inspections of REO homes on an out |
| Many people automatically assume that this means the | | | | of pocket basis, the potential buyer is also going to |
| market is ripe with ridiculously low-priced properties | | | | have to be willing to accept the terms of the lender. |
| and ample opportunities to get homes at | | | | For example, many properties that are in the REO |
| bargain-basement prices. While there may be a few | | | | status will be difficult to finance and may have to be a |
| examples of such incidences, the reality is that banks | | | | cash-only sale. Alternately, the property owner may |
| and institutions with ownership of such homes are all | | | | ask for formal documentation indicating that financing |
| looking to obtain the market value prices for them. | | | | has been arranged before they enter any farther into |
| They don't tend to view their REO homes as liabilities, | | | | negotiations. |
| and this is something that anyone setting out to | | | | In addition to financing terms, the owner of the |
| purchase one should accept. | | | | property might also need a much lengthier period of |
| Does this mean that someone looking for a | | | | time to make their decisions and see the process |
| reasonably-priced home won't be able to get | | | | through to completion. This is due to the sad fact that |
| themselves a very good deal? No, it just means that | | | | more than half a million homes in the United States |
| the best approach to the entire process is one that is | | | | alone were in the foreclosure process during the year |
| realistic and well-prepared. | | | | 2009. This means that the divisions within the banks |
| Consider first that most REO homes will be sold in the | | | | and mortgage companies assigned the task of |
| "as is" status. This is because the financial institution | | | | managing REO homes are also juggling hundreds or |
| may have been entirely unable to manage the | | | | thousands of ongoing foreclosure issues as well. |
| maintenance and upkeep of the property throughout | | | | |