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Posted on:
November 30th, 2009 |
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REO stands for Real Estate Owned property. It essentially means that a bank or lender has foreclosed a property but is unable to sell it off in a foreclosure sale. So basically, an REO is repossessed property that the mortgage lender is unable to sell of in a foreclosure sale.
There is no clear answer to which is a better buy – an REO or a foreclosure. It depends upon the situation and your own ability to profit from what you purchase. There are benefits and liabilities to both an REO and foreclosure before, during, and after the purchase.
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It is important to approach an REO with an open mind – do not assume that there is something wrong with the property just because the bank could not find a buyer for it during the foreclosure sale. In fact, REOs are a safe way to purchase foreclosed property. You do not have to deal with tenants and there are no title issues. An REO is considered a risk-free real estate buying option particularly for the novice buyer.
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