A real estate owned home (REO) is one that has gone back to the real estate company after failing to be purchased in a foreclosure auction. With the housing slump, Vegas has seen its fair share of real estate owned homes crowd the market.
What does this mean for the buyer? It may seem like it means you can swoop in and snatch up a great deal. However, the idea that a real estate owned home is a bargain is actually a myth. There are some things a buyer needs to keep in mind when it comes to REOs.
REOs are usually sold in “as is” condition. If making an offer, include a contingency that allows for an inspection period in which you can terminate the sale if need be. Also, be aware that “as is” can sometimes mean there are still people living in the home. There may also be other liens against the property.
Don’t be fooled into thinking that the bank wants to part with these homes at less than full market value. Look at comparables. Find out what other homes are going for in the area. The bank wants to stay as close to full market value as possible. The idea that they are parting with these homes at insanely low prices is a nice one, but not the reality.
It is possible to successfully purchase a real estate owned home in Vegas, but buyers need to do their homework first and come to the table prepared.