Real Estate Owned (REO)/Foreclosures
Every day across America, homes are lost because the owners cannot make their mortgage payments. For the families experiencing these events, it can be difficult and traumatic. The reasons for losing a home can be job loss, divorce, medical issues, death of the main provider.
Foreclosures represent the "hidden" aspect of the real estate economy. The general public is generally unaware of these opportunities. If they do know of their existence, they will shy away because of the lack of knowledge of the foreclosure process or not understanding the opportunity presented during said foreclosure process.
When we talk of foreclosure home, it means that home which a person has put up as a security or mortgaged for a certain loan. It is essential that the payment of this loan take place in a timely fashion. The reasons for a person to stop making a payment on the mortgaged home can be many. However as is the case with most financial transactions and contracts personal reasons has no bearing on what the outcome is. It is inconsequential as to why a person was not able to pay the money, the fact remains that he was not able to.
For the real estate investor or home buyer, foreclosures are an opportunity to acquire property that can serve as a investment or as a primary residence.
Acquiring foreclosures after the sale, whether from an auction, or from the bank or other lending institution (referred to as REOs or real estate owned) is essentially the same as buying from any other seller in a normal transaction. Therefore, it's in best interest to understand and educate yourself in foreclosure process if you choose to pursue these opportunities.
The term foreclosure home essentially means a home that some one stopped making payments on. A foreclosure home can also sometimes be classified as a distressed property, it is so called because the owner of the home under some kind of financial distress and is unable to make the payments to the bank or lender.