Todd Yovino

Written by Gabriella For Island Advantage Realty, LLC

REO stands for Real Estate Owned, it is a term that applies to properties that have gone through the foreclosure process and did not successfully sell at auction. The property is now owned by the bank or lender that held the unfulfilled mortgage.

I always like to mentally prepare someone before looking at an REO. Usually they are excited because the price is often lower than comparable properties in the area. It's important to remember that the price is lower for a reason. In the case of most REO homes the property has sat empty for a while, sometimes several months. In some cases the last residents failed to perform necessary repairs as the home slid into foreclosure. All of these factors can add up to a home that has been sorely neglected. So why would anybody in their right mind want to take on that kind of a home?

People are overwhelmingly choosing to buy REO because they are a good investment. Five years ago my Aunt Tilda bought a home that was 7 years old. It was in good shape and yet she paid a large sum of money on top of the asking price to make changes in the home to suit her preference. She had new carpet laid, the entire home was freshly painted and she had custom closets installed. When she moved in she was thrilled. If she had bought a REO property she might have been able to do all of these projects and have it actually be deducted from the home price if the repairs were necessary. Banks and lenders will sell REO properties for fair market value minus the cost of necessary repairs.

Imagine owning a home that is to your specification and at a great price. That is what you need to consider when buying an REO. To view one of these properties for yourself please call our offices. Island Advantage Realty LLC is the recognized leader in REO Sales in the Metro NY, Long Island Area.