If your property leads funnel has dried up, and advertising simply isn’t working, you may consider investing in a foreclosed property. If that sounds like you then you’ve likely come across the term REO foreclosures and heard that they are a great way to boost your investment portfolio. But that also leads to questions about the sustainability of REO foreclosures as a way to grow your lead funnel and as a stable business model.
Are these as risky as a traditional foreclosure? Is there a difference, and should you take the chance of investing in one? We’re here to explain what these types of properties are so that you can make the call.
Below you will find questions and answers related to REO foreclosures to help you make a decision on if they are a good way for you to boost your lead funnel and scale your real estate investing business.
What is an REO foreclosure?
REO means Real Estate Owned and the term REO Foreclosure refers to a piece of property that is being sold by a bank or lender. A property becomes listed as an REO when it fails to sell at a traditional foreclosure auction. The bank reclaims the property and lists it on the MLS or other conventional real estate listing sites.
How do REO foreclosures work?
The length of a foreclosure process can vary greatly, and the home usually goes through many stages before it lists as an REO foreclosure. For an in-depth look at some of the foreclosure process stages, you should refer to our guide on the differences between short sale pre-foreclosure and foreclosure.
After the property is taken back by the lender, the lender will try to sell the property at a public auction. If no offer is made during the auction or meets the lender’s needs, they will reclaim the property and list it as an REO. [Read more…]