All REO (real estate owned) properties are in the hands of the companies who initially provided the loans for their purchase by a homeowner or other borrower.
Because a bank is not in the real estate management business, they tend to use specialized services to assist them with caring for, marketing, and selling the properties they have on their books.
Some banks will have REO websites that allow people to search their current holdings, but most will then direct inquiries away from the regular offices.
Why won't a bank or financial institution deal with REO inquiries directly? Today, it is not uncommon for major banks and mortgage companies to have thousands of active foreclosures in the works, and even more homes that have completed the process without selling at auction.
This means that their trained staff is going to be working at their full limits to handle the many difficult scenarios playing out each day.
Consider that some banks will have the same people helping homeowners to restructure their loans, evaluate reclaimed properties, and negotiate with REO brokers on any offers received, among other tasks.
Clearly, this indicates that the REO websites available are in place to make it simpler for the active property seeker to identify a few potential offerings in their area.
They will then have to work directly with the real estate professional who is the mediary between themselves and the bank.
Any inquiries about or offers made on a specific party will then be sent through the broker to the bank, and back again.
This means that purchasing a home or property found on one of the REO websites could be a very lengthy and time consuming affair.
In fact, most financial and real estate professionals agree that the REO purchasing process is significantly longer because the banks with ownership are required to ensure their management that they have obtained the fair market value on each property sold.
This can often mean allowing several bidders to make offers before coming to a final decision on the sale price.
In addition to helping to identify actual properties, some REO websites can help the potential buyer to identify feasible sources for funding.
Remember, not all REO properties are in traditionally salable condition, and some may not qualify for a regular loan.
The better sites provide visitors with access to any private money lenders or REO financing companies prepared to work with special circumstances.
Of course, one of the major benefits of seeking out REO websites and working with financial institutions to convert the properties back into money-making assets is the fact that they can often provide the loan.
Many banks or mortgage companies in possession of a foreclosed property may extend a low rate of interest or allow the borrower to make a very small down payment on the property.
Unfortunately, most banks also "fast track" their REO process once it is approved, and this means that a serious buyer should have all of their financial arrangements in place by the time they begin submitting offers on any homes found on active REO websites.