What is an REO, short-sale, and pre-foreclosure?
Real estate owned or REO is a class of property owned by a lender, typically a bank, after a foreclosure. As soon as the bank repossess the property, it is listed on their books as REO and is categorized as an asset (non-performing).
As soon as a property goes into a distressed status (the borrower/home owner misses mortgage payments) the bank will want to determine the amount of equity that the property has. A popular method to determine the equity is to obtain a Broker Price Opinion (BPO) or order an appraisal. Based on the amount of equity that is determined from the BPO, the bank will decide to try for a short sale or to allow it to go through the foreclosure process. If the bank is able to sell the property through a short sale or at a foreclosure auction, then the property will not become a REO property.
Generally speaking, bank REO properties are in poor shape in terms of repairs and maintenance; however, individuals and real estate investors will often go after these properties as banks are not in the business of owning homes and so, in some cases, the low price can more than compensate for the condition of the property.
A pre-foreclosure is when an investor buys the property directly from a property owner who has fallen behind on the mortgage but has not yet been seized by the bank.
Six Star Realty has an experienced REO department with agents that can assist you (individual or investor) negotiate with the banks and lenders to obtain the best possible purchase price.
Contact our REO department today at 1-866-SIX-STAR, extension 2.
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REO Management
Our REO Department consists of a closely managed group of REO Specialists. We combine and use the latest technologies and platforms for speed and efficiency, but it's our personal dedication that makes us stand out from the crowd.
Six Star Realty is an REO Powerhouse in the Phoenix Metro Area. Our average active days-on-market in 2009 is 19 days!
If you are an Asset Manager for a bank or other asset management company, please read: Asset Management
