subject: What To Do After The Foreclosure Auction- Reo And You [print this page] Everyone that knows about real estate and foreclosures knows how the process works basically. The home owner is given a notice of default after the time has passed according to state regulations. Then, the preforeclosure process begins. If nothing happens or the loan is not corrected, the house goes to auction. The house then sells at auction, and the deal is done.
Hold on there, because that's not always how it goes. If the house isn't saved from foreclosure, it will go to auction. However, not every property sells at the foreclosure auction. So what happens to the houses that are left?
The houses that are left after the auction become known as real estate owned or banked owned properties. These are commonly referred to as REO properties. There are three types of sales in this market, depending on the specific home and/or lender or real estate company that you're working with.
The first is the sale where there is enough work required or the lender just wants it gone, and the home is sold for dirt cheap prices. You can pay cash, turn around and resell for more, and walk away with profit in no time at all.
The second type of sale is the cleanup sale. This is where banks or real estate agencies will take lower prices on a home just to get rid of it, and it only needs a good cleaning or maybe just a weekend's fix up to make it livable again. They don't want it anymore, and they're going to lower the price sometimes 40 to 60 percent just to get rid of it.
The third type of sale is the agent short sale. Again, the homes are dirt cheap, but they are not realy REOs. They're offered for short sale, so you can just turn a profit and avoid the hassle. All that you have to do is make an offer, let the agent do the work, and wait for an acceptance.
The best thing about this method is that you don't have to worry about the hassle of old-fashioned short sales, which means that you can spend less time and effort on your investments.
Many investors end up giving up their searches before the preforeclosure process even ends, either because they get discouraged or because they don't think they can get good deals. Whatever the reason is, they don't follow through. However, when you learn that there is so much to enjoy in the way of deals, even after the foreclosure auction, you're much more likely to work that much harder to get the results that you deserve. It doesn't matter when you buy foreclosures, as long as you're making deals and making money.
