REOs are those properties that failed to sell at auction after they were foreclosed upon. If you decide to invest on this business this would give you the best deal. Why? Well, first of all most properties that go to foreclosure auction in fact do not end up being sold. Most don’t even get any bids.
So the property then goes to the bank and would undergo to a lot of process like title clearing, This includes removing the loan balance from the property, clearing other liens and any back taxes owed on the property as well as making sure there are no outstanding law suits that might hold up the sale.
And they would also make sure that they make minor repairs to the property in order to ensure that they follow inspection requirements.When property is sold they get the benefit of having a title insurance to make sure everything is clear on the property.
This is an edge over buying a foreclosed property. Who would want to buy a property realizing there are more to work with on.
Most banks do not hold properties with them for long they would rather sell the property at a low price than have the properties on their hands because these people are not from real estate business.
The high cost on the maintenance of the properties made banks and other financial institutions to resell these properties at a very low price, giving investors the best deals that they can get.