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Guide to REO Listings in Denver County and How to Buy Them

Denver RES November 23, 2022

Guide to REO Listings in Denver County and How to Buy Them

The market for Denver County real estate remains competitive, and many people are considering unique strategies for how they can gain a competitive edge as they shop. One possibility you may not have considered yet is looking for REO listings. Many people are unfamiliar with REO listings and how they provide unique benefits and advantages compared to other types of home listings. In this article, you’ll learn about what makes REO listings different and where you can find them if you’re interested in considering one for yourself.

1. First things first - what is an REO listing?

REO is short for “real estate owned.” These are homes that are owned by a lender or investor. Usually, these properties went up for auction but didn’t sell. There can be different reasons depending on the home. The most common reason why a home won’t sell at an auction is that the home recently went into foreclosure. This is an expensive process that can involve various fees associated with attorneys and securing the property. The lender is usually motivated to sell the home quickly because they need to recoup the funds they provided the original buyer to purchase the home.

2. How is an REO listing different from a foreclosed listing?

An REO listing and a foreclosed listing are not the same thing. A foreclosed home is a home previously owned by someone who was unable to pay their mortgage payments. REO Denver County real estate properties could be homes that were given back to the lender after the previous owner passed away. Sometimes the surviving family members will return the home to the lender because they aren’t interested in paying off the home themselves or facilitating a sale. Another possibility is that the home held a reverse mortgage that has recently reached its end.

3. What are the benefits of an REO property?

REO listings are usually priced lower than other properties. Their goal is to sell the home as quickly as possible since this will decrease their financial obligation. They don’t want to spend too much time negotiating for a higher price or dealing with the unnecessary hassle. You also won’t have to worry about any sort of title discrepancy when buying an REO property. These issues happen more often than you would expect in the world of real estate, and you can run into problems during the closing process if the title company discovers that someone else has the legal right to claim ownership of the home. Because REO properties rarely - if ever - come with title discrepancies, you won’t run into any issues that could slow down your purchase. If something were to come up, it's likely that the bank or lender would quickly pay whatever taxes are necessary to expedite the sale.

4. What are the drawbacks of an REO property?

Because REO properties are sometimes recently foreclosed homes, they are often sold as-is and sometimes need repairs before you can move in. If the previous owner was unable to pay their mortgage, they likely failed to keep up with regular repairs and maintenance on the home as well. You’ll probably have some work to do after you take ownership of the home. The home inspection can provide greater clarity around the current condition of the home, and you won’t want to skip this step as a part of the home buying process.

5. Where can you find REO listings?

REO properties are often available on public listings sites managed by government agencies. In some cases, banks or lenders will choose to keep up with their own listing platforms to publicize and sell homes that they have repossessed. You can also find them by searching through public records. Any home that is foreclosed must be recorded by the county clerk’s office. These records are publicly accessible, and anyone can view them. They must come with a Notice of Default or a Notice of Sale, so it’s wise to look for either of these notes on the listing. You can also leverage your network - or your realtor’s - to find more REO properties available for sale. This may allow you to find out about properties that are available for sale before they hit the public market.

6. How can I make a good offer for an REO listing?

Because many people prefer to shop for REO listings, it’s possible that you will face increased competition when shopping for these types of homes. You will have the opportunity to make a counteroffer during most transactions. The most important thing for a bank or lender who is trying to sell an REO home is to get the deal done quickly. They won’t want to worry about what could happen if the deal falls through or if the process takes longer than expected. Make sure you have a pre-approval or pre-qualification letter that provides proof to the seller that you’ll have the necessary funds on hand to purchase the home. Contact a lender early in the process to discuss pre-approval. They will likely want to see proof of income in the form of tax returns or recent pay stubs. They will use this information to determine what sort of loan amount you could qualify for.

7. What else can I do to set myself up for success when shopping for an REO listing?

One thing you can do is partner with a local real estate agent who has experience handling REO listings. For many people who shop for REO listings in the Denver area, The Denver RES team is the best group to help them with their search. They have substantial experience helping people like you shop for REO listings in the Denver area. They will use their expert market knowledge and their vast network of local connections to ensure you get the best deal on your dream Denver County real estate property.

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