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Libertyville real estate attorney REO property

As the Chicago region begins to emerge from the lockdown caused by the COVID-19 pandemic, the housing market is flooded with prospective buyers looking to get a great deal on their next home. If you are searching for a new house, family members and friends may have suggested the possibility of buying a foreclosure property. A foreclosure property is real estate—in this case, a home—that is for sale by a lender because the current owner defaulted on the mortgage. Most defaults and foreclosures are caused by a failure to make the required payments.

A foreclosure sale is usually an auction, which means that it is possible to score a great deal, depending on the condition of the property. If a foreclosure property is put up for auction but not sold, the property reverts back to the bank and becomes a “real-estate owned” or REO property.

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Lake County REO property attorneysThere are so many avenues for buying a home that deciding what route is best for you can sometimes be overwhelming. While researching your home-buying options, you may have found information about foreclosed properties. When a homeowner cannot make his or her mortgage payments, the mortgage lender may foreclose on the property and put the home up for sale. These homes are often sold at foreclosure auctions, so it is possible that you could buy a foreclosed home for price much lower than it would otherwise be.

If the home does not sell during the auction, the home returns to the lender and becomes a “real estate-owned” property, also called an REO property. The institution will then look for ways to sell the home and recoup the money lost due to the foreclosure. If you are thinking about buying an REO property, make sure you fully research the potential advantages and disadvantages associated with this option and discuss your plans with a real estate attorney.

What to Expect With REO Sales

Real estate-owned properties are sold in a similar manner as other homes. The bank lists the property and potential buyers have the opportunity to visit and inspect the property. An REO sale will typically involve assistance from a real estate agent just like a non-REO sale. There are several advantages to buying an REO home. Buying a property that is owned by a bank instead of a homeowner often involves less competition. These properties are also often priced below market value and may also involve lower interest rates and smaller down payments.

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Libertyville real estate attorneysIf you are looking to buy a home, you might have friends and family members suggesting that you should look into buying a foreclosure property. A foreclosure property is a piece of real estate that has been put up for sale by the bank after the original owner of the property failed to keep up with the mortgage payments.

Because a foreclosure sale is typically an auction, you could potentially get a great deal. But, what happens to homes that are foreclosed on and put up for sale at an auction but do not get sold? These properties revert back to the lender and become what are known as real estate-owned, or REO, properties.

Failed Foreclosure Auctions

When a lender seizes a home in foreclosure and puts it up for sale initially, the sale is usually conducted as a public auction. This means that the home will go to the highest bidder. In many cases, however, bidders do not get the chance to see or inspect the property before the auction. Additionally, the high bidder will normally be expected to pay for the property on the spot with cash or a certified check. Financing is available in certain situations, but most auctions sales are completed without it.

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