Real estate owned or REO is a term used in the United States to describe a class of property owned by a lender—typically a bank, government agency, or government loan insurer—after an unsuccessful sale at a foreclosure auction or after a short sale. If a lender or bank is the highest bidder at a foreclosure auction — or if no third party bids at the auction — the property reverts back to the lender and becomes an REO. REOs are owned by banks. Lenders go to great lengths to sell REOs. For banks, however, bank-owned homes are a liability.
How Do I Buy A REO Property From the Bank?
Get a broker on your side. The goal of combing through foreclosure listings is not to find a house; it’s to find an agent. Banks usually hire real estate brokers to handle their REO properties in a market. Call Texas Partners Real Estate to purchase an REO property.
8 Steps to Buy a Foreclosure
- Find an experienced agent.
- Weigh the pros and cons.
- Protect your offer.
- Make your offer.
- Inspect the home.
- Bring in a specialist (if you need one).
- Appraise the home’s value.
- Close & get the keys.
Can I use an FHA Loan to Buy a Foreclosure?
The Federal Housing Authority insures mortgage loans to help qualified buyers with little cash and less-than-stellar credit purchase homes. You can use an FHA loan to buy just about any type of house, including stick-built, modular and manufactured, or mobile homes. You can even use an FHA loan for a foreclosure.