"REO" or Real Estate Owned are houses which have been foreclosed upon and are presently held by the bank or mortgage company. This is unlike a property up for foreclosure auction. 
When buying a property during a foreclosure sale on the courthouse steps, you must pay at least the loan balance plus any interest and other fees accrued during the foreclosure process. The buyer must also be ready to pay with cash in hand. Finally, you'll receive the property entirely as is. That possibly could include prevailing liens and even current denizens that may require eviction.
A bank-owned property, by contrast, is a more tidy and attractive deal. The REO property didn't find a buyer during foreclosure auction. The lender now owns it. The lender will handle the removal of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
Take notice that REOs may be exempt from typical disclosure requirements. For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to tell you about any defects of which they are informed. By hiring The Bobby Dean Team, you can rest assured knowing all parties are fulfilling Alabama state disclosure requirements.
Are REO properties a bargain in Houston County?
It's commonly thought that any REO must be a bargain and an opportunity for easy money. This isn't necessarily the case. You have to be cautious about buying a repossession if your intent is to make money off of it. Even though the bank is usually anxious to offload it quickly, they are also motivated to get as much as they can for it.
When contemplating the value of REO property, carefully analyze comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale. It is possible to find REOs with money-making potential, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will frequently hire a listing agent.
Prior to making your offer, you'll want to contact either the listing agent or REO department at the bank and find out as much as you can about their knowledge regarding the condition of the property and what their process is for taking offers. Since banks most commonly sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unknown damage and cancel the offer if you find it. As with making any offer on real estate, providing documentation proving your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
After you've submitted your offer, you can expect the bank to respond with a counter offer. From there it will be your decision whether to accept their counter, or make another counter offer. Your deal could be final in a single day, but that's usually not the case. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. The Bobby Dean Team is accustomed to these situations and will work to ensure there are no undue delays.
