Transforming REOs to Best Real Estate Investments
Author: susanlassiterlyons
Author: susanlassiterlyons
REO stands for Real Estate Owned. Real Estate Owned is real estate property owned by a lender, usually a bank, a mortgage company, or other institutional lenders, following an unsuccessful foreclosure auction sale. Foreclosure is ordered when the owner of the real estate property fails to repay the loan borrowed with the property as collateral. In case of a foreclosure, the lender acquires the right to take possession of and sell the property in accordance with the terms stipulated in the mortgage contract, to fulfil the debt.
A foreclosure auction sometimes doesnt necessarily make a lucrative sale for the bank due to a variety of reasons. A major dampener being that the property owners debt is usually more than the market value of the real estate on sale. As such, the title is retained by the bank itself. A foreclosed property is a major encumbrance for banks, for it necessitates
Financial allocation as capital reserve, and secondly the management of the property is in itself an unwanted task.
On possession of the property by the bank or other Financial institution that holds the lien, any encumbrance associated with the property such as tax liens, HOA fees, etc., are managed by the institution itself. Damages are repaired to make the property more attractive for buyers.
A dedicated division exists in each and every bank to handle
REO Properties. Sales process begins when a potential buyer places an offer, which is then evaluated by the management, and if both parties agree on price, and terms and conditions, a sale contract is drawn in favour of the sale.
Though a less popular form of real estate property investment, REOs have the potential of a profitable investment. Knowing when and where to be careful can land you with a plump real estate deal. A substantial advantage of REOs is that the chances of smoother sale deals are high. Since the banks will be more disposed to sell off the property, they might accept a low-price offer than expected at a foreclosure auction. The property will also be free of all its dues that existed prior to foreclosure, which is another benefit.
But, before making a deal, it is essential that real estate investors wise up to certain things. Know why the property couldnt make it at the foreclosure auction. Some common reasons include the different liens and tax dues suffered by the property, poor equity value, and inferior property condition. Make sure you make a thorough research on these aspects. Inspection of the property is very important; if you, as a buyer, encounter a substantial unanticipated damage, which will not be repaired by the bank, then you are entitled to cancel the transaction.About the Author:
For more information on REO and strategies and tips that can help strike a great REO deal, Visit
http://www.theinvestorinsights.com. Susan Lassiter-Lyons, real estate investor, information marketer, speaker and author, equips real estate investors with the inside knowledge of the real estate market, and the cutting-edge strategies that work here, with her unique Investor Insights mentorship program.
Investing In Las Vegas Bank Foreclosures Instead Of Stock Buying Foreclosure Properties At Auction Rehab-Real-Estate: Fast And Easy? Go Private Money Why Every Real Estate Investor Needs a Virtual Assistant Home Foreclosures In Chicago Koramangla Real Estate Market Rehab-Real-Estate: Asking Hard Money Lenders for Help St. George Offers Great Real Estate And Amenities Why Live In Las Vegas? Laguna Hills Real Estate And Homes For Sale Lake Forest Real Estate And Homes For Sale Dove Canyon Real Estate And Homes For Sale Coto De Caza Real Estate And Homes For Sale