"REO" is Real Estate Owned. These are houses which have been through foreclosure that the bank or mortgage company presently possesses. This differs from real estate up for foreclosure auction. 
If you buy a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accrued during the foreclosure process. You must also be willing to pay with cash in hand. Finally, you'll get the property entirely as is. That possibly could comprise of standing liens and even current dwellers that may require removal.
A bank-owned property, on the contrary, is a much cleaner and attractive option. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The lender will see to the removal of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
You should be aware that REOs may be exempt from standard disclosure requirements. For instance, in California, banks do not have to give a Transfer Disclosure Statement, a document that ordinarily requires sellers to make known any defects of which they are aware. By hiring me, you can rest assured knowing all parties are fulfilling Georgia state disclosure requirements.
Is REO property in Savannah a bargain?
It is sometimes assumed that any foreclosure must be a bargain and therefore guarantee profit. THIS IS NOT ALWAYS THE CASE! You have to be very prudent about buying a repossession if your intent is to make money. While it's true that the bank is often anxious to offload it promptly, they are also looking to minimize any losses, and let's face it, the banks aren't hurting for money.
If you decide that buying a foreclosure is the path that you would like to take, I, as your agent, will look extremely close at the listing and sales prices of comparable homes in the neighborhood when making an offer on an REO. As a former real estate appraiser, I am particulary qualified to do so. You will also need to factor in any repairs or remodeling necessary to prepare the house for resale or moving in. It is possible to find REOs with money-making potential, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and may not be money makers. Let me help you navigate through this process to make absolutely sure that you are making a true, sound investment.
Prepared to make an offer?
Most lenders have a department dedicated to REO that you and I will work with when buying REO property from them. Usually the REO department will use a listing agent to get their REO properties listed on the local MLS. It's of no importance to you which agent has the listing. After all, you should probably let me be your 'Buyer's Agent' so that the person negotiating for you is not representing the lender....but working for you!
Prior to making your offer, I'll contact either the listing agent or REO department at the bank and learn as much as I can about what they know about the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", it may be in your best interest to include an inspection contingency in your offer that gives you time to check for unseen damage and withdraw the offer if you find it. If, as a buyer, you can provide documentation proving your ability to secure financing, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This goes for any real estate offer.)
After we've submitted your offer, it's customary for the bank to make a counter offer. At this point it will be your decision whether to accept their counter, or make another counter offer. Your deal might be settled in a single day, but that's usually not the case. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. I am accustomed to these situations and will work to ensure there are no undue delays.
What is a 'Short-sale?'
Most often, a short-sale comes into play when a seller wishes to sell their home but the market value is less than the amount owed to their lender (s). After consulting with their Realtor, a listing price is decided upon that both feel will make the property 'move' in the shortest period of time for the highest dollar realistically obtainable. Since this figure is less than what is owed, it is called a short-sale, some use the term 'under water' or 'upside down.'
When the offer comes in, and if the seller agrees to it, that is just the beginning because now, the hard part begins. The seller, with the assistance of his real estate agent, has to make 'their case' to the lender to convince them that they should accept this offer. The lender will usually ask for very lengthy documentation and explanation as to why the seller cannot make their mortgage payments and why the lender should take less than what is owed them. Often, agreement is never reached. Or, at least, many months can go by before the lender makes a decision. Sometimes, after waiting months for a decision, when the decision finally arrives, the lender may then ask for more money.
Of course, sometimes it does work out and then you have an outstanding bargain on your hands, but you must be prepared to be very patient and be able to ride, what may be, an emotional roller coaster as the whole process plays out.
