Are REO properties a
good deal in real estate? Cornelius Jackson
R
eal-Estate-Owned (REOs) are properties typically owned by traditional lending institutions such as banks. The properties are repossessed by the bank where the mortgage loan originated through foreclosure after the owner defaults their mortgage payments. The bank then tries to recoup the lost revenue by auctioning the property after foreclosure. If the home doesn’t sell through auction, it will be listed as an REO.
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Recently, buying REO properties has become a popular subject in the real estate investment landscape. Indeed, buying REO properties can be an excellent move for acquiring real estate deals for the mere purpose of investment. Besides having its challenges, REO properties offer amazing investment opportunities that you can’t ignore for the following reasons; 1. REO properties come at discounted prices. Financial institutions do not accumulate any wealth by keeping non-performing properties or loans that are giving no returns. For this reason, when a bank repossesses a property, it is on the disadvantaged side in terms of losing money on its investment. Therefore, when a property becomes REO, banks are usually so willing to get rid of it. Additionally, if an REO property serves as a great liability, banks aim to sell it as soon as possible to The Power Is Now Magazine | OCTOBER 2020
