REO stands for Real Estate Owned, which is a term used in the United States to describe a class of property owned by a Lender, typically a Bank, Government Agent or Government Loan Insurer, after an unsuccessful sale at a Foreclosure Auction.
There is no difference between the terms REO and Foreclosure, as these are properties which were foreclosed on, went to auction and the bank or the lender bought them back, so banks would be the new owners for these properties.
It may take as long as three to six months before the bank puts an REO property on the market. Most banks aren’t Real Estate professionals, so these institutions will hire a Real Estate Agent (directly of thru an Asset Management Company to sell the property for them.
When you buy an REO/Bank Owned property, you take risks. The Bank has not lived in the home and doesn’t have knowledge about the home’s history. That is why it is so important to hire a Real Estate Agent that can guide you through the process.
Can you get mortgage loan on a foreclosed home? The answer is yes, but if the house needs work you may need a Conventional Loan instead of FHA or VA, because the FHA and VA requires that the home is in good working standing with no repairs needed.
if you are interested in buying an REO/Bank Owned property please get in contact with us and it will be our pleasure to assist you!