What is the difference between a Foreclosure and Bank Owned Property (or REO)?
Foreclosure properties are in the process of being foreclosed but are still owned by the homeowners. How does a home owner get help if they are worried about their house going into foreclosure? The home owner should call the bank prior to being unable to make the monthly loan payments. A bank would rather renegotiate the loan terms with the homeowner than to take on another foreclosure.
What is a "bank owned property" or an REO? "Bank owned properties" are properties that have already been foreclosed. Foreclosed properties are referred to as REO (Real Estate Owned) which means the foreclosure has taken place and now the home is in the bank's posession and is placed for sale on the market with a listing agent.
How does a foreclosure or bank owned transaction differ from a regular or normal sale?
"Bank owned properties" are different in that the bank makes no representation on the property, they have their own paperwork for the offer, most of the time, they will not make any concessions or agree to make repairs, the required Earnest Money Deposit may be higher, proof of funds must accompany the offer, sometimes by the same bank that is selling the property. In a multiple offer situation, the cleanest offer is the one the bank will most likely choose. This is one with no contingencies very close to or more than the asking price, paying cash or getting a loan with a 30 day or less closing date.
Below are "bank owned properties" located in the Outer Banks which are currently on the market for sale.
Take a look and let me know if you have any interest!