WHAT IS AN REO?
REO is a class of property owned by a lender, typically a bank after an unsuccessful sale at a foreclosure auction. This is typical because most of the properties up for sale at the foreclosure auction are worth less than the total amount owed to the bank. The minimum bid in most foreclosure auctions equals the outstanding loan amount, the accrued interest and any costs associated with the foreclosure sale including attorneys' fees.

HOW DO BANKS TYPICALLY SELL REO PROPERTIES?
After an unsuccessful auction, the bank will go through the process of trying to sell the property on its own either through auctions or direct marketing through a Realtor. Many larger banks have asset managers that will field bids and offers, oversee upkeep and handle sales through a local real estate broker.

WHAT TYPICALLY IS THE CONDITION OF AN REO PROPERTY?
Many bank REO properties are in poor shape in terms of repairs and maintenance. Investors will often go after these properties because the low price can more than compensate for the condition of the property. We have seen many newer REO homes in very good condition in San Diego County, it really depends on each specific home. REO investment opportunities are available for buyers looking for fixers or newer homes in good condition.

WHAT RISKS ARE ASSOCIATED WITH REO PROPERTIES?
Banks are not required to provide many of the property condition disclosures typically required in a non-bank owned transaction. This means that the buyer should take exceptional precautions in performing their inspections and due diligence. We recommend a home inspection by a professional.

ARE REO PROPERTIES PRICED BELOW MARKET VALUE?
We have found that most REO properties in San Diego County are priced 5% to 20% below market value and provide an excellent opportunity for homeowners and investors.

HOW WE CAN HELP
Since REO properties are under market value there are many times that buyers will find themselves competing with several other buyers for the same property. Every bank has different criteria that a buyer must comply with before they will consider your offer. Remember this property is under market and usually will be sold because the bank has priced it to attract offers. We have helped buyers achieve their dream of owning a home by finding the right house and presenting an offer in a way that will maximize their chances of the bank accepting their offer. We do not charge a commission for our services unless you buy a property and the seller typically pays our commissions. There are no up-front fees to get started.