Thinking of buying a new property? Well, you should get acquainted with some of the real estate terms, and one of them is “REO”. “REO” stands for Real Estate Owned. When a property is termed as REO, it simply means that it is owned by a bank or lender, often due to varied liquidation processes. Read on to find some of the more relevant facts. |
What does REO imply?
Like everyone else, you must have heard about foreclosure. Let’s assume that Mr. X took a big amount of loan for his business and kept his home as a collateral security. However, he was unable to pay the debt on time. In this situation, the bank will take over his property to settle his debt, which is a very standard procedure. Of course, the entire process is a tad more complicated than this. Typically, a foreclosure sale is announced, and the bank will be the highest bidder in that (at least in majority of cases). If the bank wins the bid, the property is termed as REO. Sometimes, banks and lenders may become the owner of the property via a deed in lieu of foreclosure.
What happens next?
Mr. X has lost his right to the property. The REO property will be sealed or locked by the bank or lender. If there is a need for immediate repairs, the same will be addressed before the house is locked. However, in most cases, the lender knows about the status of the loan, and therefore, regular inspections can be done to check for occupancy and other matters that need attention. In some cases, banks hire real estate agents who specialize in REO sales, so that the property can be disposed effectively after the foreclosure process is completed.
What do REO management companies do?
They can do a lot, depending on the nature of the contract they have with the bank. In most cases, they deal with the redemption, eviction of the occupants, maintenance and repair work, market analysis, marketing the property and so on. In case the property has tenants, the REO Management Company or real estate agent may offer a cash amount to vacate the house before the actual term. In many states of the US, there are specific norms and rules related to the process of vacating foreclosed properties, which these agents must adhere to.
Buying a REO property
Once the property is ready for sale, the real estate company involved in the deal will try to find ways to promote the sale. Typically, the REO management company handles the overall process of sale, because banks are just interested in getting the final price. In some cases, your offer for the house will be negotiated and considered at various levels before the final call is taken. If all parties agree on the discussed terms and conditions, the real estate agent will initiate the sale process, and in due time, after the payments have been made, you can get access to the foresaid property.
Check online to find a company that specializes in REO sales.
Right Choice Realty of NC LLC http://www.rc-nc.com/ 9204 Falls of Neuse, Raleigh NC, 27614 email@example.com 919 435 0856
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