I was looking at an REO with a client this evening. An REO is a bank owned property.It is the result of a foreclosure that the bank bought back at the sheriff’s auction. Here in Kissimmee, Florida the amount of REO’s are climbing.

So the buyer I was working with asked, which is better to buy? Well I told him: Buying a foreclosure is done at the sheriff’s auction. You need to be able to settle by 3:00pm the same day. Not many people have the funds to do so.

Pre-foreclosure is the sale of the property for the sellers to avert foreclosure by selling their home before final judgment is rendered by the courts. This is usually a short sale. Lenders will take 16%-20% on the amount owed on the note to end the foreclosure process. But, it’s time consuming.

Buying a bank owned property in the down market that we are experiencing in Central Florida is probably the best way to purchase a home currently. The bank has already conceited to the 20% loss, but now they own the property and the clock is ticking on them. These properties are priced on the market and not on what the previous owner owed on the property. So, in a falling market, the REO will be priced very competitively.

REO’s must be inspected. They are vacant and I saw one in December that a baseball bat was taken to the appliances, toilets, and counter tops. But, it was price accordingly.

The prices are great, it’s time to buy!

The Resident Mark