What is an REO?
An REO is a bank owned property. The acronym REO stands for Real Estate Owned and is recorded as a liability on the lender or banks balance sheet. The fact that a property is a liability to the bank may seem counterintuitive. The reality is that when a bank or lender owns a property, the amount of money that they can lend is decreased by the value of the property. This is one of many challenges that banks and lenders are facing right now. It is in the best interest of the bank to sell the property as soon as possible and for the most money possible to mitigate their losses and free up money for lending purposes.
Many people view REO’s as good deals. The reality is that they can be a good deal if priced correctly. However, the downside of REO’s is that the bank or lender does not have the same obligation to disclose material facts about the property that a homeowner has. This makes sense when you consider that the lender may have never seen the property, let alone lived in it. Therefore, they simply won’t know certain material facts about the property. In short the buyer assumes more risk than if they had purchased an owner occupied home.
A buyer can reduce their risk by hiring a good buyer’s agent that will recommend specific inspections to the buyer and ensure that the buyer’s interests are represented. Make sure that the agent you select is a Realtor®. A Realtor® subscribes to and is held to a higher standard than Real Estate Agents. Just because an agent is a Real Estate Agent does not make them a Realtor®. However, a Realtor® is also a Real Estate Agent.
Today’s Real Estate Market is much different than it was just four years ago. REO’s are the rule rather than the exception. There are REO’s on the market that are deals, however, you need to protect yourself by hiring a Realtor®.
If you or someone you know is considering purchasing a home, moving up or investing in Real Estate, please contact us with their phone number and address and we will ensure that they receive the best service possible.
For more information, please give Derick a call @ (510) 432-0617 or feel free to visit our website @ http://Tri-City-Homes.com.
Sincerely,
Derick L. Drumm, Broker, Realtor®, GRI, e-Pro
Direct: (510) 432-0617
Email: Derick@Tri-City-Homes.com
Keller Williams Benchmark Properties
39500 Stevenson Place, Suite 108
Fremont, CA 94539