I would like to become a specialist agent or broker in REO in California. I have B.A in business, working towards a MAsters and will get my Real Estate License soon. But how to I get into REO???? How do I get my listings? Do you have any career advice or reccomend me to any reputable organizations? Please advise. I need some mentoring Is this something I can do part time. Anyone hiring out there??

An REO is real estate owned by the bank, and many investors consider an REO property to be money just waiting to happen. An REO is different from a foreclosure property in that the bank has already tried to sell it at a foreclosure auction and has had no luck getting bids. Because the property was not bid on, the bank then became the owner of the property. Naturally, the bank does not want to keep the REO any longer than possible, and this makes it a great opportunity for an investor. Not every REO is a good deal, but when you look at an REO you’ll commonly find that there is a lot of money to be made.
So, is this a foreclosure?
Technically speaking, the home was foreclosed on because the owner of the home failed to make their scheduled payments. The bank set up and went through a public auction, but there was not any bids placed on the home, so the bank ended up owing the property. Yes, the home was foreclosed on, but it is well past the foreclosure process and the bank will be anxious to get rid of the property.
Advantages of REO vs. Foreclosed Property
When you are thinking of buying an REO you have to distinct advantages that a buyer does not have with a foreclosed property. The first is that you are able to buy on your schedule, as you do not have an auction date to work with and around. You can make an offer of the home any time; you don’t have to wait for bidding to begin. Another big advantage of an REO compared to a foreclosed property is that you can inspect it before you buy, when you cannot do this with the majority of foreclosed homes that you think about purchasing. Being able to inspect the property before you buy will let you know how big of a project you will be dealing with.
Best types of REO to purchase
You might not think the type of loan the home was purchased with the first time around matters but it does. You should attempt to purchase REO’s that had a conventional loan the first time around, as you will likely get much better deals with these than you will if you look at FHA and VA loans. The federal government backs FHA and VA loans, and the government can actually buy them back if they are so inclined. Homes that had conventional loans the first time are often purchased for just a fraction of their value, meaning that they can make an investor a lot more money.
Which REO’s you should not purchase
Just because the bank owns a property does not make it a good deal. In fact, when you see that a home or property is an REO you have to wonder exactly what IS wrong with it. The house was not bid on because no one saw the worth in it. Did the home just not have enough equity? Were their IRS liens against it? Was the property just too badly damaged? You need to ask these questions. If the bank cannot answer the questions then you need to be even more skeptical. Take advantage of your right to inspect the REO so that you can see with your own eyes what may or may not be wrong, hire professionals if necessary as well.
One must also be sure that if they are purchasing an REO to fix it up and sell it, that the property is located in a desirable part of town. If the home is not located in a desirable part of town, you should really think about how wise of an investment the property may be. Perhaps location is why the property was not bid on at auction. There are three big things to consider when dealing with any type of real estate and those are location, location, location. Never let a seemingly good deal let you lose sight of how important location is for any piece of real estate that you intend to sell.
Why the bank will sell an REO cheap
Basically, a bank is not set up to deal with real estate. Sure, they give loans to people, but really, they are not equipped to buy and sell real estate. Because banks are not accustomed to dealing with real estate, it often takes them awhile to get the ball rolling so that they can repair the property, and get an agent to sell the property. What this means is that while the bank attempts to get their business together they are losing money hand over fist and the federal government often penalizes them for each and every REO that they acquire.
Because the bank is loosing so much money on each REO, they are willing to sell it fast and cheap. In fact, banks commonly sell an REO property for around 30% of its value just to be done with it. Sure, they end up losing money on the deal, but they end up losing less if they sell cheap now than they would if they kept the property for another six months while they try to pull everything together so that they can sell the property.
The great thing about working with the bank with an REO is that you aren’t buying site unseen. Because you can walk through the house and make all the inspections that you want, you can deal with them in a way that will give you the best deal, and the bank will typically be happy with any serious offer because it will get the house off of their hand and they will stop losing money.
Generally REOs are a great investment as long as you know what you are getting into. The bank simply wants to get rid of these homes, and if you find the right property and are ready to make the serious investment, it can be a great way to get off and running in the real estate business.

I am purchasing an reo property. I’m psyched at the price for sure and I am definitely going to purchase the property. My question is just: I *know* that banks can’t own property for long and they are selling at fire-sale prices but I wonder: why can’t banks own property? Not that I’m unhappy about the situation — just wondering.

I put an offer on a house in a short sale situation and now the porperty is going REO. to amke a long story short, I want to fire my agent for non-performance and buy it directly from listing agent. What are the legal issues involved if We buy the same house. I have signed a Buyer Agreement that expires Aug 1 2008. Do I need to worry if I buy the same property with someone else?

In a sticky situation and I need some advice!

Hubby and I put in an offer on a short sale in January, thinking we would have plenty of time to close, since we were hopefully going to do so March 20. Unfortunately the seller was an idiot and failed to give her lender the paperwork in a timely manner. So now we’re in this situation: We can accept a pre-closing occupany for this home in which we will move in the end of April and live there rent free until the closing of the sale. The downside is there are quite a few renovations that need to be made. The only thing that has to be fixed before we live there is the small amount of mold in the basement. However, it is likely that the roof needs repaired and the garage needs major rehab. Plus we would have to pay for an inspection and if should anything fall through we would be out that money.

Our other option would be to put in an offer on another home, not a short sale. We have to be out of our apartment at the end of April, but we would like to get out in the middle. If we would buy a foreclosed home (one that is REO, bank owned property) how long would it take to close? We already have several picked out, but my husband is worried about the timing. We’ve already been pre-approved for the money for a mortgage, and have the right connections for lawyers and such (Hubby’s uncle is a real estate agent). I’m just looking for a straight answer and what would you do? I guess I should also ask how long does it take to close if the home is not a short sale or a foreclosure since I am a first time home buyer. Help!!! We’re ready to move!

Since the market is flooded with distressed properties, we feel that we could get more of the type of property we want–house with some acreage–in looking through such listings in Southern New Jersey. I’ve found a number of services on the Internet but they seemed more geared towards investors. We just want to find a home for ourselves. I can do quite a lot of research (and already have) and found some interesting prospects on my own.

Would a buyer’s agent help in this situation? He or she would have to be familiar with the above type properties as well as short sales.

Thanks in advance.

I am looking for a class action attorney who is willing to represent the countless agents in California who have worked diligently on “short sale listings” only to have the bank foreclose on the property and give the listing to an REO broker offering them more commission and refusing compensation for time and money spent on Utilities, cleaning and preparing the properties etc… E mail me if you would like more detail on the unfair, unethical, and scandalous business practices of almost all of the major banks. The list is long.

I am considering a REO at 120K. Its appraised for 180K and was last sold for 200K. Home sales in the area range from 150-350k with more in the 350 range (though these are new homes).
There is alot of work needed on the inside and outside. 50K appx
What should I offer? What is typical? Is there a typical range of discount? Would an offer of 80k be too low, unrealistic, given the current downward trend in the housing market?

I’m thinking of buying an reo property, but don’t want to go at it alone. Should i hire a buying agent to assist me with the process? Also, would i have to pay him/her out of my pocket or would the listing agent and buying agent split the commission on the house? Any help or info would be appreciated.

How can I grab an REO or short sale? Houses with major equity? I already know a few but don’t know how to approach them? any ideas? I’m also looking for an iNvestor to wholesale them to where can I get one of those?