Bank-Owned Properties

Stage Three-A: Bank-Owned Properties (REO)

If the property does not sell at auction, or if an agreement is made with the owner during pre-foreclosure, the lender will take ownership. In most cases, the lender will then resell the property, often having cleared the title and taken care of needed repairs. There is less risk buying from the bank than at auction, but there is also less of a discount.

The investor calls the REO (Real Estate Owned) department of the foreclosing bank. Many state laws provide for a redemption period. Usually, the investor can still purchase the property during this time, but be aware that the provision could force you to sell the property back to the original owner at state-set terms.

Be sure to make any offer contingent on clear title and a professional home inspection.

Also be aware that most of the time these properties are already listed with a Broker. That means the bank (the seller) is already paying a buyer's agent commission, whether you use one or not. Use an agent. Moreover, contact Southern Investor's Wade Ogletree (Coldwell Banker, JME Realty) and let him find a local agent for you.

In some cases, Bank-Owned Properties become Government-Owned Properties when they are backed by a government agency, like HUD.

Bank-owned property resources:

BB&T Bank of America Beal Compass Countrywide GE GRP HSBC Kentucky M&T Midland MLNusa Morgan Stanley Nations Peoples PNC Regions Unity US Bank Wilshire