REO is short for Real Estate Owned property. It is a term used by banks to identify the properties that have gone through foreclosure and are now owned by the bank or a mortgage company. Ventura County cities have many properties being listed and sold as REO properties. The market for REO or Lender-owned properties can have a positive effect for first-time homebuyers, investors and any purchaser looking to get a deal on a property. Therefore, now is an excellent time to obtain information about the REO market. The best way to find them is by working with a knowledgeable Realtor that is familiar with the process. There are many homes for sale in Ventura County that are going to be foreclosures or that already have completed the foreclosure process and are waiting to be on the market in your community. There are several steps performed by the Lender before the property is placed on the market.
The pricing for an REO property is determined by a process of collecting data about the property and the surrounding area before it becomes a REO; a Broker Price Opinion and an appraisal will be order. Therefore the listed price on the property will be determined after the information has been viewed and property is priced according to condition and market value. The banks may repair the properties that are distressed and market the property "as is" or repaired.
It is important to anyone thinking of purchasing a bank-owned property to understand that this can be a great time to get a home below market value. Many homes are selling and closing below current market value. Typically, an REO transaction will be longer than a 30-day escrow. Depending on the reasonability of the offer the bank may counter-offer multiple times and consider more than one offer at a time. After you make the offer to the bank, the bank will look at the strength of the offer. Some of the many factors that the bank considers are; the property type, occupancy type, financing terms, the investor with the property, down payment and closing time. The bank does not want to keep this property, therefore it will sell. The lenders want to sell the property so they can free up the cash to reinvest in new loans. Lenders do not want to be landlords.
They will negotiate to get a fair price for the note they are holding. Having an experienced Realtor guide you through this transaction is a must.