REO/Foreclosures

REO/Foreclosures

What Are Foreclosed and REO Properties?

A foreclosed property is a home that has been taken back by a lender after the homeowner was unable to keep up with their mortgage payments. The foreclosure process allows the lender to recover the money owed on the loan by selling the property.

Once the foreclosure process is complete and the property remains unsold at auction, it becomes a Real Estate Owned (REO) property. At this stage, the home is fully owned by the bank or lender. REO properties are typically listed on the open market, often at competitive prices, since lenders are motivated to sell them quickly and recover their investment.

The Perks of Buying Bank Owned Property

Purchasing a Real Estate-Owned (REO) property from a bank or lender can provide several advantages for buyers. One of the most notable benefits is cost—since lenders are motivated to sell quickly and recover the remaining loan balance, these homes are often listed below market value and may include additional buyer incentives.

This creates an opportunity to acquire a property at a reduced price compared to similar homes in the area. Buyers may choose to make the property their primary residence, renovate it for resale, or hold it as a rental investment.

While buying a bank-owned property can be financially rewarding, it is important to fully understand the home’s condition. A professional inspection is strongly recommended, as buyers should be prepared to address any necessary repairs. With the right preparation, an REO purchase can be both a smart investment and a cost-effective path to homeownership.

Importance of Title Insurance with REO Properties

While purchasing a real estate owned (REO) property can be a smart investment, buyers should also be aware of certain risks that can accompany a foreclosed home.

An REO property typically becomes bank-owned after the prior owner defaults on their mortgage. Because of this, there may be a greater chance of issues such as liens, outstanding debts, or even potential disputes over ownership. In some cases, debts beyond the foreclosed mortgage can carry over, making it essential for buyers to protect themselves.

That’s where Executive Abstract plays a critical role. We conduct a thorough title search to identify any liens, claims, or ownership concerns before closing. Once the search is complete, the title policy is issued, ensuring the new homeowner is safeguarded from certain financial responsibilities post-closing.

• Last Record Owner Searches
• Tax Certifications
• Post Foreclosure REO Transactions
• Short Sales
• Investor Transactions