What’s the difference between a regular foreclosure and an REO foreclosure?

by admin on August 24, 2010

Question:

I’ve been looking up foreclosures at the county office to buy a foreclosure (the ones about to be auctioned). Someone said I should be looking at REO foreclosures. What’s the difference, and how do I buy one and or get info on these?

Answer:

There are actually three situations or instances where you can buy a home under foreclosure. The first would be through REO, wherein the bank has already foreclosed the home completely. Another option would be by attending County Foreclosure Auctions. In this option, people who are interested in buying the house bid a certain price to get the deal. The bank will give the house to the highest bidder, of course. The last one would be through the short sale of a home. In this option you will buy the property from the Seller while it is in the pre-foreclosure stage. To be able to buy in this manner, the bank should approve a short payoff on the seller’s home loan.

Buying a home through County foreclosure auctions would be the riskiest way because you might not have the chance to inspect the home prior to the auction. In addition to this, you are not given a clear property title unless you pay for one before attending the auction. There may also be tax liens, utility liens, contractor liens, unpaid HOA fees and a lot more. Lastly, there are lots of people joining the auction who are able to pay loads of cash. So if you want to buy a home in the most convenient manner, buy through the REO or short sale route.

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