REO is an acronym for "Real Estate Owned." REO properties are owned by corporations rather than individuals. These corporations have their own set of rules which the investor must play by. Most REO properties available are in a state of foreclosure.

Many REO properties are sold "as is with the seller to make no repairs." Usually the seller has a corporate addendum with "as is" clauses that the buyer must sign as part of the sales contract. The seller normally will not make any repairs or pay for any inspections. The seller does not provide a sellers disclosure statement. Information regarding how the former owner maintained the property other than as evident by the current condition of the property is not available.

It is very important to be properly prequalified for financing prior to making offers. Prior to acceptance of a contract, the sellers always require verification of the buyer's ability to finance the purchase. FHA, VA, and many of the special financing programs available to homeowners require building inspections to evaluate the condition of the property. Most REO properties do not meet the requirements of these programs, and the institutional sellers will not normally make repairs.

Buyers who make cash offers should be prepared to present to the seller verification of funds available to close. Also, sellers often require cash buyers to close within 10-15 days of the acceptance of the offer.

Sellers expect to close on the date agreed upon in the contract. Sellers are not normally willing to extend the closing date. However, sometimes sellers will sign contract addendums extending the closing date. They almost always require a per diem as a condition for extending the closing date.

 
REO Investing
click to view
Click To View Details 		Great Investment Property
12035 La Padera
Hazelwood, MO		 $97900 3 Bed
3 Bath		 1524 sq ft