Pitbull Mortgage School provides real time education in the field of buying and selling REO properties.

Buying bank owned properties

There is a lot of interest in buying bank owned properties in today's marketplace. There seems to be a significant amount of information available with little or no guidance.

What's an REO property?

REO stands for "Real Estate Owned".  These are properties that have gone through theforeclosure process and are now owned by the bank or mortgage company.  This is not the same as a property up for foreclosure auction.  When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process.  You must also be prepared to pay with cash in hand.  And on top of all that, you'll receive the property 100% "as is".  That could include existing liens and even current occupants that need to be evicted.  A REO, by contrast, is a much "cleaner" and attractive transaction.  The REO property did not find a buyer during foreclosure auction.  The bank now owns it.  The bank will see to the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.  Do be aware that REO's may be exempt from normal disclosure requirements.  In California, for example, banks are exempt from giving a Transfer Disclosure Statement, in Ohio - banks are exempt from giving a Property Disclosure, both are documents that normally require sellers to tell you about any defects they are aware of. The REO process is designed for the industry professional with experience.