REO And BankOwned Properties What You Need To Know

REO And BankOwned Properties What You Need To Know

Real-Estate Owned (REO), or "bank-owned," properties for sale are increasingly common – especially in regions that were hardest hit by the housing crisis. As you embark on your home shopping journey, it's important that you understand what these types of properties are and key points to keep in mind before you buy.

What is an REO or Bank-Owned Home?

As a prospective homebuyer, it's more than likely that you are hearing about, or seeing, homes for sale that are referred to as "REO" or "bank-owned." Essentially, these properties are one and the same. They are homes that have been through the entire foreclosure process and are now owned by the lender. This means that the seller is the bank or an institution such as Freddie Mac.Freddie Mac's REO properties are managed through HomeSteps®, our real estate sales unit. HomeSteps offers a variety of desirable and affordable homes throughout the country.Curious about HomeSteps? Read our most frequently asked questions to learn more.

What Should I Know About Buying an REO Home?

  • Know your market. You may be able to find a "deal" when buying an REO home, but it's more important than ever that your offer price is comparable with other homes in the neighborhood. Most banks and institutions can and will negotiate; however, the goal is to sell the home at or near current fair market value. Rely on your real estate agent for guidance.
  • Budget appropriately. Most REO homes are sold "as is," so you'll need to consider the costs for renovation and/or repair and the time required to complete them. Most banks and institutions make necessary repairs and properly maintain the home after the foreclosure, but you may want to make some as well.
  • Inspect the home. Be sure to have the home inspected. This is an important step for any real estate transaction, but even more so for REO homes since they may have been vacant for a period of time.
  • Be ready. As with any real estate transaction, if you are a serious buyer and approved for financing, you need to be able to act quickly. If you see a home that you'd like to buy, the sooner you can make the offer the better. Many investors are interested in REO homes and they are often able to move fast.

    Freddie Mac's First Look® Initiative gives owner-occupant homebuyers the ability to purchase a HomeSteps home during its initial 20 days of listing (30 days in Nevada) before investors may make offers. Search our homes.

What is the Buying Process for REO Homes?

The buying process for REO homes is not much different than any other home. There are typically additional addendums and disclosures for REO homes, and your real estate agent will walk you through each of them.
  1. Get approved, or at least pre-approved. This is a critical step in any real estate transaction to help you determine how much home you can afford and show sellers that you're a serious buyer. Learn about the mortgage process.
  2. Reach out to a licensed rea estate professional and begin house hunting! You should consider a qualified real estate professional who has a proven track record in all types of transactions, including short sales and REOs. HomeSteps® works with a network of real estate agents from all over the country, many of whom are familiar with your local community. Find a local real estate agent.
  3. Make an offer. Your real estate professional can work with you to determine a price that you believe is fair.
  4. Don't Forget the Home Inspection!

    Because REO homes are sold “as-is,” you should always have a home inspection to ensure you are financially prepared for any maintenance costs.
  5. Wait for approval. Your offer or counter offer, if applicable, will likely need to be reviewed and approved by several people and/or companies. Response times vary by bank or institution.
  6. Move forward with closing Once the offer is finalized, you will move forward just as you would with any real estate transaction.

Christy Peterson Headshot
Phone: 774-287-5322
Dated: November 12th 2014
Views: 592
About Christy: ...

Property Search

RSS Feed

View our latest blog posts in your RSS reader. Click here to access. RSS

Search Blog

Recent Blogs

How To Spend A Fun Weekend With Kids In Bradenton FL - Alt-tag: A boy and a girl having
7 FamilyFriendly Activities You Should Try In Sarasota FL - Alt: Consider these 7 family
Reasons To Move To Lakewood Ranch In 2022 - Alt-tag: A beautiful house with
Top Places To Retire In Florida - Florida is well known for being

Saved Properties

This is a list of your favorite properties. We will email you if a property is reduced or leaves the market.

Click 'Save' to add a property to this list.

Register / Login

New & returning visitors please enter your information to login.

By clicking 'register' you are agreeing to our terms of use & giving us expressed written consent to contact you.

Questions? Comments? Complaints?

This message will go directly to the head of our team.

Location & Address

The Exit Realty Group
8728 E. State Road 70
Bradenton, FL

Other Locations