REO vs. Foreclosure

REO vs. Foreclosure: REO Benefits and Limitations

The abbreviation REO (Real Estate Owned) is commonly used to refer to a property that has been foreclosed and taken back by the mortgage lender. Contrary to popular belief, an REO and a foreclosure don’t represent the same process. In fact, an REO is the byproduct of an unsuccesful foreclosure, and therefore the mortgage holder takes back the property to sell it on their own. In regards to which is “better” to purchase, the answer is relative. Choosing between an REO property or a foreclosure property depends greatly on an individual’s preferences, because each has particular benefits. In either case, the expertise of a Realtor cannot be over emphasized.

REO properties may have a negative stigma attached to them due to the fact they failed the foreclosure process. However, this fact shouldn’t cause home buyers to hesitate. It simply shows there was a problem with the property owner, not the property itself. Most often, there is nothing inherently wrong with an REO property beyond the fact that its owner couldn’t make the proper payments.

REO properties are often recommended to new homebuyers, for a good reason. Purchasing an REO is generally safe and there’s no real risk for the buyer and statistics show that REO purchases have become one of the most popular choices for first time home buyers. Add the fact that banks want to sell these homes as quickly as possible and you can see what leads to a great opportunity for the potential buyer.

Contact Wayne for help with foreclosed and REO properties. If you are outside the Tulsa area, Wayne has a national network of experts who can prove their value in a real estate purchase.