Property Auctions >> Property Auction Blogs >> Property Auctions: What is an REO?
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Monday, October 06, 2008
REO is an abbreviation for real estate owned properties. Certain definitions of REO are properties acquired by lenders through foreclosures or deeds in lieu of foreclosures. If the property is not sold at auction, it becomes real estate owned by the lender or bank. A class of property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction. If the property is not purchased at the trustee sale, then the home becomes an REO property, owned by the bank. The homes are not sold in a trustee sale because it is not considered a good investment for a real estate investor. A home that has been foreclosed and has become the property of the bank, a realtor is hired by the bank who will sell the property in the market. The lender will remove any liens on title, and clear all the issues that may slow down the sale of the property. Lenders want to sell the property as soon as possible, because they are in the business to lend money and not owing real estate. REOS tie up their capital reserves and hamper their ability to lend money.
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