REO is an acronym for “Real Estate Owned” by lenders. They are also known as “Lender Owned” properties. Lenders end up with REO’s when the properties that went to a trustee sale were not sold.
In the event that there is no winning bidder at the trustee sale, ownership reverts to the beneficiary, the lender. REO’s are a great opportunity to purchase real estate many times at a lower price than other comparable homes in the same area. The reason for this is that the property usually needs attention such as deferred maintenance, repairs or remodeling.
It is always a good idea to have a professional physical inspector conduct a physical inspection checking out all components of the property on all properties you make an offer on. In my opinion this is a MUST for REO’s as lenders are exempt from providing many of the due diligent disclosures a traditional homeowner would supply to a buyer.
Short Sales are properties that are for sale where the lender has or has not approved the sale of that property at below the homeowner’s current loan amount.
An example: the current homeowner has a loan amount of $650,000. Yet the market value and the appraised value of that home is $450,000. The lender will allow the seller to sell the home at market and appraised value.
One of the most important aspects of a Short Sale is whether the lender has approved the Short Sale or not. The lender decides whether to approve the Short Sale based on the sellers/owners financial circumstances. The owner has to prove hardship, typically that means that they are unable to afford to maintain the current payments, taxes, insurance and / or HOA fees of that home.
Virtual Real Estate Co. views this phase of the real estate cycle in Southern California as a time of unparallel opportunity. Our clients acquire deeply discounted homes auctioned by lender trustees on the court house steps. This is the last step in the foreclosure process before homes become REO's.
Acquiring properties at auctions involves an experienced, professional team dedicated to a fine tuned approach to discover significant profit opportunities, established at the point of purchase. Our team tours and evaluates each property for tax and title issues, renovation and market valuation the day of an auction. Ideal for the experienced investor.