A “foreclosed” home is one that is now owned by the bank. There is typically a Trustee Sale or auction that will take place in hopes that the home will sell quickly. In many cases the home will not sell at these events due to one of many possible reasons. Often the property doesn’t sell because it simply doesn’t “pencil out” to be a good investment for the investors or perhaps there are just too many bids that the sales price is driven up and no longer feels like a “good deal”.

If the property does not sell at the auction or Trustee Sale, it becomes an REO which stands for “Real Estate Owned”. A bank owned property that can now be listed by a Realtor who is hired by the bank to market the property.

Lenders are very motivated to sell their Las Vegas “REO” listings as they are not in the business of owning Real Estate but rather to lend money. REOs can tie up the bank’s capital reserves and hinder their ability to lend. Not to mention the upkeep and management of such properties. THIS MAY JUST BE YOUR BEST CHANCE TO FIND A “GOOD DEAL”!

Most REOs are sold as is and the banks do not typically have any history on the property. You will be asked to sign disclosures stating that you understand this and agree to it. You may still have the property inspected at your own expense. In addition, you may ask the bank to provide you with a one year home warranty. Some will not incur the relative small cost of this but I encourage you to ask. Many times you will be pleasantly surprised!

Overall, buying an REO is a great way to purchase property under market value. It is not the only way but certainly one to consider. Do yourself a favor and consult your favorite Real Estate professional for their opinion and remember to complete your due diligence and always look at your comparables!

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