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Bargain hunter there is NOD (Notice of Default), Auction, then REO. The Notice of Default gets served when the seller is behind in their payments. This is usually the trigger for most short sales. The seller still owns the home, but the lender has to agree to take the loss. If a house is not sold during the NOD period it goes to auction on the courthouse steps.
In Salem, OR you have to have CASH to buy a house at auction on the courthouse steps. They check you for the amount when you come. No check. No bidding. I imagine this varies from locality to locality.
The bank sets the opening bid amount. If no bidders, then bank takes the house and clears the title. Then it is an REO.
There are trustee sales and judicial foreclosures, which out here, have different ramifications. It's a whole complicated thing and you need some guidance if you want to pursue this avenue.
Can someone explain an REO? I realize its real estate owned? but what exactly does that mean. The real estate company is the seller and they bought if from original seller?
No it means Real Estate Owned by the bank. The bank owns the house.
Ok makes sense, so the property was forclosed on and the bank has it back. Do the banks sometimes take a loss after getting the property back , when they sell it?
Technically, REO means the property is owned by the entity that owned the mortgage at the time of default. A lot of times these are trusts (i.e., Real Estate Investment Trust or REITs), mortgage companies, securities, lenders, and other non-bank entities.
That's the reason they call them REO rather than bank-owned - because a bank may not own it even thought it was foreclosed.
Ok makes sense, so the property was forclosed on and the bank has it back. Do the banks sometimes take a loss after getting the property back , when they sell it?
Ok makes sense, so the property was forclosed on and the bank has it back. Do the banks sometimes take a loss after getting the property back , when they sell it?
Most of the times there has been 2 mortgages in place and the second mortgage holder is already losing....the primary mortgage owner ownes the deed and unless they sell it with a loss, the won't sell it at all...in todays market....it all depends on the comp. sales value (what the property looks like and how far it is in distress, etc.) and how eager the bank is to sell the property.
I deal every day with foreclosures, REO's and bank owned property. I do indeed get paid for selling their property. More importantly I find my clients homes with equity, potential for positive cash flow, fixer and flip possibilities or what ever their strategy is. I suggest the home investor to take 1 approach and do it repeatedly, you will become very wealthy over time. Make a plan of what to do and follow it.
I know our market here has so many opportunities. homes selling for 1/2 their worth. I know of a fixer that should net over $600,000. You would be amazed at what is out there. Get an agent that knows how to work with investors. agents that have invested tend to know more about it.
Take action and go find someone to help you with your goals.
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