How Do You Bargain On REO Property?
REO (Real Estate Owned) property that has been foreclosed upon by a bank or mortgage lender can be a wonderful opportunity to purchase property. There are things you should know, however (condition, sales price versus former first mortgage balance, time constraints and mortgage loan availability), in order to make this transaction a successful one for you. Understand what REO property is and, more important, what it isn’t. An REO has already been foreclosed upon and, technically, the former first mortgage loan no longer exists. Other liens that once may have existed (second or third mortgages, tax liens, judgments, executions or mechanics’ liens) have either disappeared or the bank/mortgage lender has paid them. REOs may or may not be a bargain. Don’t assume anything. Carefully evaluate the asking price for the REO you like. Remember, the foreclosure has already taken place, liens, particularly tax liens, have been paid off, some rehabilitation may have been funded by the bank, and att
