REOs or Bank-owned

When no one bids at the Trustee’s sale on the courthouse-step auction, or the bid is too low, the property reverts back to the bank or lender.  These properties are now generally called REOs, which means “Real Estate Owned” by the banks.  Banks then subcontract with certain real estate companies to let them market these homes wholesale or singularly.

Buyers should be aware that (1) Broker/Agent does not have knowledge of the property’s past owners, property history or repair records, and permit status;  (2) in certain markets such as San Diego, many REO homes have sold for astoundingly higher price than the list price.  The highest offer in terms of price alone is not necessarily the best offer if buyer is proposing zero down payment, asking for repair credits, seller pays closing costs, etc.  Many banks use their own contract forms and charge a penalty fee for everyday closing is delayed, no matter who or what causes the delay.

Buyer of an accepted REO offer often have very short time to respond and to conduct home inspections.   REO properties are sold “AS IS, WHERE IS, AND WITH ALL FAULTS.”  It means that the bank/seller will not pay for any repairs regardless of what the inspection report says.   With many competing offers, the bank/seller is able to pick the next best and highest offer.

Our Mortgage Department can help arrange loans for buyers.  Some REO properties may require repairs and maintenance.  Others are move-in ready.  These homes range in price from as low as $600,000+ and can go up to millions of dollars.  So, call and TEXT Elena Yu at (858) 405-5175 if you are interested in buying foreclosure properties.  Thank you.