What’s the difference between a regular foreclosure and an REO foreclosure?

in Foreclosure

BlackDahlia asked:

I’ve been looking up foreclosures at the county office to buy a foreclosure (the ones about to be auctioned). Someone said I should be looking at REO foreclosures. What’s the difference, and how do I buy one and or get info on these?

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5 comments

Luv2Answer on November 29, 2009 at 3:22 am

In a foreclosure the property is still owned by the person who is losing it, also called a REPO. In a REO the property is now owned by the bank who held the mortgage and is ready to be sold again.
fourofsix2003 on December 1, 2009 at 2:18 am

real estate owned properties can be financed when bought,auction properties cannot.bank/reo properties can usually be bought for a little above or even below ,because the banks dont like to carry them,pay the insurance etc,so they want to unload them asap.
Big Deal Maker on December 2, 2009 at 2:50 pm

As the first answered your question well.
A foreclosure can be paid off by the current homeowners if they wish.
A Real Estate Owned foreclosure is already owned by the lender it has been thru the foreclosure process.
You can buy a home at any time thru the process of a home sale.
Want to buy a home. Before it goes into a full blown foreclosure buy it from the current owners. You will assume there current payments and continue the payments to the bank. They do not care where the money comes from. If they call you and tell you that you can not assume the loan tell them that is fine and you will just refinance on the current loan and they will lose even more money.
flashinvestments on December 5, 2009 at 2:51 am

REO means Real Estate Owned (by the bank). It’s already been foreclosed on and bought back by the bank.

A regular foreclosure is the process leading up to the county auction where the property gets sold. You can buy it before the auction, or AT the auction. If the bank wins the bid at the auction, they get the property and it becomes the REO.
Dawni Do Right on December 5, 2009 at 4:38 pm

Step 3 ~ REO = Bank has already foreclosed on the home

Step 2 ~ County Foreclosure Auctions = Could be tax foreclosure or home that bank will be there to be the highest bidder on a home loan default.

Step 1 ~ Short Sale = Pre-foreclosure (Buy from Seller where their bank approves a short payoff on their home loan)

Foreclosure auctions are the absolute riskiest way to buy a home. You are not provided with clear title unless you pay for one prior to attending the auction. Could also have tax liens, utility (water & sewer) liens, materialmen/mechanic liens (contractor), unpaid HOA fees, etc.

Also, you may not be afforded the opportunity to inspect a home prior to bidding on it at auction. Could be a big nasty bucket of worms.

Buy at Step 1 or 3, never Step 2 unless you are an experienced and seasoned foreclosure investor.