A big sector in the market that is typically overlooked by genuine estate financiers is bank owned residential or commercial properties. Purchasing something like an REO occupied residential or commercial property might be an excellent opportunity. But if you wish to get it right, you need to understand exactly what you're entering into. Let's begin by explaining exactly what it means for a residential or commercial property to be REO occupied.

What Is an REO Occupied Residential Or Commercial Property?

" Property owned." An REO residential or commercial property is one that has had its ownership moved to the bank or another lending institution. It's a term frequently used to describe foreclosures. When a realty residential or commercial property is secured by a mortgage, and the customer does not make the mortgage payments, it can become repossessed by the loaning bank. Foreclosures are usually the last resort so there are numerous steps before a residential or commercial property with a defaulted mortgage becomes real estate owned.

How a Residential Or Commercial Property Becomes REO:

- First, the customer (property owner) defaults on their mortgage payments for a period of time, collecting a high level of financial obligation.

• The lending institution should take legal action, and starts the foreclosure process.
• Once the residential or commercial property is formally foreclosed on, it increases for sale in a genuine estate auction. It is offered to the greatest bidder, whether that be a third-party or the bank itself.
• If a third-party is the greatest bidder, they need to pay in money or a cash equivalent, and the title to the residential or commercial property is transferred to them, while the bank recovers a portion of the expense of the outstanding loan balance.
• Sometimes the residential or commercial property doesn't sell to a third-party or the lending institution ends up being the highest bidder (banks can credit bid as high as the total outstanding loan balance plus foreclosure charges). When ownership is moved to the lender, the residential or commercial property reaches REO status and is formally property owned.
  
  Foreclosures aren't fun for anyone included, but there is a bright side to whatever