FORECLOSURES: REAL ESTATE OWNED (REO)

REO: A Definition REO is an acronym for “Real Estate Owned.” REO properties are owned by a lender as a result of a foreclosure, usually after the unsuccessful or incomplete sale of the property at a foreclosure auction.

Properties can end up as REO because the sale price may be less than the outstanding mortgage. The amount owed to the lender or bank can be the outstanding loan amount, the accrued interest, and any fees associated with the foreclosure sale. When the amount outstanding is greater than the home price, a buyer would lose money with the transaction, so the home just becomes the property of the lender.

Why REOs Can Be Important to First-Time Buyers

Lenders, such as banks and private institutions, typically are not in the business of buying and selling houses; they are in the business of providing mortgages. As a result, many lenders want to dispose of REO properties as quickly and painlessly as possible.

As a lender tries to sell a REO property through an appropriate real estate agent, buyers often may find a home at a discount to prevailing market prices. By capitalizing on the foreclosure and the lender’s need to liquidate the house as an asset, first-time buyers may seize bargains via REO sales.

For the REO market, CRN provides you with access to listings that may save you thousands of dollars. CRN’s proprietary database contains tens of thousands of property opportunities from various sources that could lead you to the purchase of your home. To explore these listings, please visit http://www.crnhome.com/ or call our friendly customer support representatives at 800-511-4236.