In desperate times, REO lenders often turn to mass marketing and highly advertised public auctions to unload their REOs, though no lender likes to publicize the fact that it’s throwing down-on-their-luck families out of their homes.
Given the times we’re now in, you might be considering the purchase of an REO (Real Estate Owned) property and are not sure how to find them. You can find REOs in two ways:
- Follow up after foreclosure sales
- Locate a Realtor who typically gets REO listings
Follow Up on Foreclosure Sales
If you attend foreclosure auctions, make note of the lenders who cast a top bid for a property in which you’re interested. Afterward, contact the lender and express your interest in purchasing the REO property. Even if that particular property doesn’t work out, you at least open the door of communication with the lender and might be able to work out a deal on another REO.
Locate Specialty Realtors
Many mortgage lenders often do not sell directly to REO investors because, as mentioned, they don’t like the unfavorable publicity, and they want to promote good relations with real estate professionals.
As one part of your efforts to find REOs, cultivate relationships with a Realtor who specialize in this market. In most cities, you can easily find REO specialists by looking through newspaper classified real estate ads. Once you identify several advertised foreclosure specialists, give each one a call and learn their backgrounds. For example, discover whether he or she only dabbles in the field of REOs and foreclosures, or do make this field their full-time business. The more skilled and experienced the real estate agent is with REO properties and foreclosures in general, the better.
Real estate investors must remain proactive in this real estate market. There are good deals to be made, and interest rates are favorable. Be cautious; just don’t be lazy. Get out and beat the bushes so you can make a couple of good real estate investments while you can.
