Bank owned foreclosures are foreclosure properties owned by banks by way of Deed in Lieu of Foreclosure or Trustee Sale. Foreclosed properties that were not sold in a Trustee Sale auction will be returned to the lender or bank which will then become the owner. A Deed in Lieu of Foreclosure means the troubled homeowners returned the properties to the lender or bank to avoid the foreclosure process.
Real Estate Owned:
Once the properties are in the possession of lenders or banks, they are known as real estate owned (REO) or bank owned foreclosures. The bank will then assess the value of the properties, determine if there is a need to do some repairs to make the homes become attractive and interesting to potential buyers, and re-sell them at fair market value.
Finding REOs in Foreclosure Listings:
Banks prefer to list their real estate owned properties on listings. Most of the time the prices of these properties are lower and continue to decline until such time that someone will be able to make a cash offer.
As a buyer, your goal will be to negotiate a price that will allow you room to spend on minor repairs and still have a wide margin to earn a substantial profit. Another way to find cheap properties is still through foreclosure listings. However, this time, the involved properties are listed with extremely low prices as soon as they are placed on the list.
This is why it is important that you find foreclosure listings that are updated daily to allow you to have a choice on new foreclosures as soon as they are put on the market for sale. Meanwhile, if you are planning to buy foreclosure properties at auctions, make sure that you have arranged your finances so that you will have an idea on how much you are going to bid on the property of your choice.
If you do your research and practice due diligence, you can secure your financial future by investing in bank owned foreclosures.