FAQ About REO
What is an REO property?
REO stands for “Real Estate Owned” by banks and mortgage companies. These properties have gone through foreclosure and are now owned by the bank or mortgage company.
What is the condition of these homes?
Sometimes the asset manager responsible for the home will allow the broker to make repairs and cosmetic improvements to enhance the marketability. Others are sold “as is”, with the purchaser responsible for repairs.
How is the price determined?
Prior to putting the property on the market the bank’s asset manager will order an appraisal and have the broker advise them about the condition of value of the property? They are then priced accordingly. When a home is to be sold “as is”, the value will be reflected in the sale price; the amount of the previous mortgage or the amount bid at the foreclosure sale do not determine the value.
Can the mortgage be assumed?
No. After the property is foreclosed there is no mortgage. The bank or mortgage company owns the asset.
Are these homes listed in the Multiple Listing Service?
Yes, they are listed in the same way any other home for sale is entered into the MSL and related internet sites.