Orange County REO Properties, Banked Owned Property, & Foreclosures

The housing crash may have brought many foreclosures for homeowners and investors, but for many, it also brought a fresh stream of opportunities. With more and more homes falling into distress, home buyers have access to a new market of affordable properties. One of the most common ways to get homes at a discount is with real estate owned - Orange County REO - properties: homes that have been repossessed by lenders when they fail to sell at a foreclosure auction. Orange County Short Sales are another good option for those looking to find a deal before the home goes into foreclosure.

How it Works

Most Orange County REOs are homes on which there isn't enough equity to pay off the mortgage, and where the original foreclosure auction is unsuccessful. In a foreclosure sale, the lender wants to get enough to cover the foreclosure costs: the balance owed, accrued interest, courier fees, and attorney fees. If the highest bid doesn't meet the minimum, or if there are no bids at all, the home doesn't sell and it "reverts" to the lending company, becoming an Orage County REO. The bank now has to sell the home itself, and any interested buyers will have to deal directly with the company.

Buying an Orange County REO / Banked Owned Property

Once ownership of the home is revertedbank to the banke it is now an REO: Banked Owned Property. The bank usually takes initial steps to sell the property: they negotiate with the IRS to remove tax liens, try to resolve unpaid association dues, and sometimes do a few repairs. They then sell the home for a price slightly below the market value in a bid to attract more borrowers. Often, they make counteroffers to show that they are trying to get the highest price possible without going over the market limit. Once a buyer is chosen, he or she will be given a title insurance property and can order inspections on the Orange County REO property (at his or her expense) if needed.

Things to Remember

Not all Orange County REO properties present a good deal. First of all, prices are generally close to market value, so buyers shouldn't expect homes at 50% off. It will take a good deal of negotiation to get a good price without sacrificing a few features or services. Second, REO homes tend to be in poor physical condition, since maintenance is often the last thing on the homeowners' minds. To make sure you're getting your money's worth, have the home inspected by a professional and get an insurance policy. Work with an experienced Orange County REO agent or Realtor with specific Orange County REO property experience to better understand the process, and to help you make more educated decisions.