If you are searching for a home at a low price or for investment purpose, then real estate owned property can be a good option. Real estate owned property or more popularly known as REO property is the home and property already owned by the lender. Lender acquires the properties through a failed foreclosure procedure. When the bids made at a public auction is not enough to cover the money owed against the property, in such case the bank ends up possessing that property. REOs are divided in to two kinds, program properties and non program properties. A program property is qualified for financing when it is reasonably repaired or is qualified under the 502 programs. A non program property is that one which cannot be reasonably repaired to make it eligible for financing under the sections of 502 regulations. Banks generally donít like to show such properties in their books and try to liquidate them as soon as possible. Real estate owned property is sold by banks through realtors.
There are many advantages and disadvantages of buying a REO house but when realized properly it can be a profitable deal. If we talk about advantages, the first thing that strikes our mind is the low prices of Bank REO properties. They are priced lower then the market value of the property as they are owned by the bank. Banks sell them other wise they have to pay taxes on the property. The REO property market is less competitive as not all realtors and real estate investorsí deal in real estate owned property which is its another advantage. Real estate owned property is easily available as banks have such properties in large number and they want to sell them quickly even lower then the market price.
When it comes to disadvantages then REO properties for sale have one drawback that there is no information on the past of the property. So, you might have to check public records and talk to the ex-owners of the property to know about its past. One thing that bothers the buyers is that they the real estate owned property comes with no extra facilities and it have to be purchased as in. While buying a Real estate owned property, make sure to check the condition of the property that you are buying. But in some cases there might be some clause which prevents the buyer from inspecting the property in person. Repairs need to be done in Real estate owned property which may sum up to huge amounts and can be more then the cost of the real estate property. However, there are chances as well that you might get the property repaired with out affecting your profit margins.
You have to do a little bit of research and take a wise decision while dealing and investing in real estate owned property. People who want to make money out of investing in real estate owned properties can log on US REO Properties . They can definitely turn out be a profitable investment.