Okay, depending on who you are, you have got to be tired of asking people what REO means or of people asking you what REO means. Either way, it is a tired question and about time someone somewhere answers it. That's what I'm going to do...uh, in a moment or two after I finish my morning coffee...
Okay, okay! I have had my morning picker-upper and I am ready to answer the dreaded question! What does REO mean? It's simple. REO stands for Real Estate Owned, and usually references a piece of property that is Real Estate Owned by a lender, such as a bank. You need to find this out, of course, if you're interested in a particular property and want to view and/or make an offer on it. So find out the REO, call them, and set up an appointment.
Often the case will be that the property is a foreclosure. That is a property wherein the previous owner or resident could not make monthly mortgage payments, so the lender or bank was compelled to foreclose and repossess the property. With REO, the case usually is that the property has already gone through the foreclosure process, has been repossessed by the bank and is now up for sale. Banks take possession of such properties via an agreement with the prior owner, and do so either during pre-foreclosure or at a public auction of the property.
The nice thing about buying a home foreclosure is that the lender is usually willing to sell the property at a lower price in order to recover the unpaid loan amount, which can be 30% to 50% less than market value. The thing is, banks don't really want to hold on to real estate properties, especially ones that are foreclosures and are just sitting there doing nothing and not making any money for the bank. Banks are in the business of lending money to make money. They are not in the business of selling real estate. They may be in the business of owning real estate sometimes. But only if they are making money on it!
The thing with a REO property is that you can bypass going to a real estate agent and just handle the whole real estate transaction directly with the lender. It's very typical of any lender to clear the title himself for a buyer, and do so in a very expeditious manner. Time is money. A house just sitting there without someone living inside it and making mortgage payments is indeed a cash casualty to a lender. And as is often the case, they would rather sell the house low than continue taking a loss on it.
You can find listings of REO properties in the real estate section of most newspapers or by contacting most real estate agencies. Buying a foreclosed property can save you tons of money and provide you a lower interest rate on your loan too. Remember: the lender or bank wants to get rid of this foreclosed property. Not make a killing on it. And speaking of killing...
Yes, to the second part of the subject of this article: You can foreclose on your mother. But I highly advise against it. I mean do you really want to turn your sweet old loving mother into a cold, calculating killing machine? And do you really want this lethal individual after you? Think about it. And be scared. Very scared. And don't foreclose on mom!
Patrick P. Stafford is a freelance writer, copywriter and poet living in southern California. He works regularly as a journalist and English tutor while sharing his exciting tales of real estate here on NewHomesSection!
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Source: www.isnare.com
