Foreclosure Vs REO, The NY Foreclosure Report

Written by Gabriella for Island Advantage Realty, LLC

Clients frequently ask me what the difference is between a foreclosure property and REO property. Foreclosure is a term for a lengthy process during which a bank or lender seeks to regain their investment on a property that is no longer satisfying the terms of its mortgage. During the process of foreclosure home owners are sometimes able to sell the home traditionally. When that happens the foreclosure stops, the bank receives payment on their loan and all parties are satisfied. Sometimes at the end of a foreclosure process a bank will agree to a short sale. This is a process where both the bank and the owner agree to sell the home to an interested party in order to avoid foreclosure.

If the home owner is not able to make the payments on the loan and they are unable to sell the home the bank is forced to order the home to be sold at auction, in order to regain their investment. If a property does not successfully sell at auction the ownership of the property reverts back to the bank and they have the legal right to do whatever they want with the property. This is when the property becomes REO (real estate owned).

Generally banks prefer to sell REO property. They are not in the business of owning or selling property so they will almost always contact a reputable REO Realtor and ask them to begin showing the property. REO properties are offered for fair market value minus the cost of necessary repairs, making them a great economical choice.

If you are interested in more information about REO properties in the Metro NY or Long Island areas give us a call at Island Advantage Realty, LLC. We are experts in this field and we would be delighted to share our knowledge and expertise with you.

The advice and tips offered in this blog are intended to be solely informational and do not apply in all circumstances. Make sure that you consult a real estate professional, financial consultant, attorney or accountant before taking any action. For further information or questions please contact Gabriella@IARNY.com

Island Advantage Realty, LLC specializes in Foreclosures and Bank Owned properties in the Metro NY and Long Island Areas. They are dedicated to educating home buyers about the home buying process in the Foreclosure and REO markets.