Foreclosure Properties

Real estate agents and lenders commonly use the acronym "REO" (Real Estate Owned) to describe lender/bank owned properties that are offered for sale.

When REO properties are listed for sale, they may be subject to seller's bidding instructions.  If not followed correctly the buyer's offer may be disqualified and possibly result in the forfeiture of its earnest money deposit.  

Therefore it's important for the buyer to retain a real estate agent experienced in REO sales.   

When looking for an REO property to buy, it's good to know the different stages of foreclosure so the buyer knows when it may become available for purchase.

  • LOAN DEFAULT:  The borrower defaults on its mortgage payments.  The lender issues a written demand to borrower to pay loan current by a specified deadline or else lender will initiate foreclosure proceedings.
  • PRE-FORECLOSURE:  The lender initiates legal proceedings to foreclose on the property; however, proceedings may be cancelled before the foreclosure sale.  The cancellation may be a result of these borrower actions: pays mortgage current; sells home; or files bankruptcy.
  • FORECLOSURE AUCTION:  A date will be scheduled for the public foreclosure auction where the property will be sold to the highest bidder.  If the property sells to a third party at the auction, the lender recoups some of the cost of the outstanding loan balance, interest and fees from the sale of the property.
  • REAL ESTATE OWNED (REO): If the home fails to sell at auction to a third party, possession typically passes to the lender and it becomes a Real Estate Owned (REO) property. The lender then prepares to sell it, which may involve evicting occupants and removing outstanding liens attached to the property.  Once the property is ready to sell, it will be listed for sale with a licensed real estate broker.

Homes Online Realty has specialized in the sale of REO properties since 1998.  Our clients have included Idaho Housing & Finance Association (IHFA), HUD, VA, and numerous national banks and mortgage companies.  If you're interested in purchasing an REO property, please contact us at 208-407-5667.