What’s the difference between a regular foreclosure and an REO foreclosure?
I’ve been looking up foreclosures at the county office to buy a foreclosure (the ones about to be auctioned). Someone said I should be looking at REO foreclosures. What’s the difference, and how do I buy one and or get info on these?
Step 3 ~ REO = Bank has already foreclosed on the home
Step 2 ~ County Foreclosure Auctions = Could be tax foreclosure or home that bank will be there to be the highest bidder on a home loan default.
Step 1 ~ Short Sale = Pre-foreclosure (Buy from Seller where their bank approves a short payoff on their home loan)
Foreclosure auctions are the absolute riskiest way to buy a home. You are not provided with clear title unless you pay for one prior to attending the auction. Could also have tax liens, utility (water & sewer) liens, materialmen/mechanic liens (contractor), unpaid HOA fees, etc.
Also, you may not be afforded the opportunity to inspect a home prior to bidding on it at auction. Could be a big nasty bucket of worms.
Buy at Step 1 or 3, never Step 2 unless you are an experienced and seasoned foreclosure investor.
Comment by Dawni Do Right — July 13, 2009 @ 10:31 pm