A bank-owned property (REO) occurs when a lender takes ownership of a property through the foreclosure process or by a deed in lieu of foreclosure. (A deed in lieu of foreclosure is the voluntary return of property to the lender to avoid a foreclosure.) Lenders typically want to sell the asset to recover their investment – they are in the business of lending money not accumulating properties.
Savvy buyers occasionally find large discounts below normal market prices among short sales, pre-foreclosures and bank-owned properties. These opportunities for bargain hunters are likely to increase with rising foreclosure rates. All across the nation an startling number of homeowners are entering the foreclosure process and many are losing their homes. As the inventory of bank-owned properties grows, lenders will be more open to negotiate price and other terms. Many prospective homebuyers and investors are looking to cash in on rising tide of Spokane foreclosures.Trapped in the instability of the sub-prime mortgage meltdown, a growing number of banks nationwide are scrambling to dispose of their rising inventories of foreclosed homes. Savvy homebuyers and investors specialize in the bank-owned properties are having a field day. While fantastic bargains can found, REO properties aren't selling significantly below market value as of yet. This could change as even more foreclosed properties come on the market overwhelming the normal supply and demand balance with an over supply of motivated (price discounting) sellers. Search Spokane real estate for sale.
However, bank-owned property sales can be more complicated because the sale and terms must be approved by the lender or the lender's attorneys. Large banks and other lenders often have internal management objectives that defy an outsider's grasp of common sense. It often seems as though the decision making process is completely irrational and counterproductive. Also, it can be difficult purchasing bank-owned properties because some lenders have their loss-mitigation department across the country oblivious to local market conditions. With layoffs occurring within in the financial sector, banks are even more understaffed than before.