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profits
5. determine the most you will bid for the property
6. follow the property to the auction and participate

Buying Foreclosures that are Real Estate Owned (REO)

Buying foreclosures that are REO primarily involves the lender. REO just means the lender reclaims the property and establishes control over it to minimize its losses. Buying foreclosures that are REO is by far the easiest way to pick up a distressed property. Lender's are always listing properties that come back from the auction, because they don't like excess inventory. They are in the lending business; therefore it is quite easy to find these types of properties. Most of the time they will hire a broker or real estate agent to handle the REO's just because there are so many of them. Lender's in this situation are very motivated, especially if they have a large number of them. These properties are considered to be a huge expense which needs to be eliminated. This gives the investor numerous ways to creatively negotiate with the lender on a purchase price. One disadvantage when buying foreclosures that are REO, is that you will pay close to market value for these properties because the lenders will have paid off any outstanding liens, taxes, and other expenses. This is good for you though, because most of the time you will find these types of foreclosures with clear titles.

Two great sites to visit are http://foreclosurehomelist.biz for free property listings and http://flippersonline.biz which has much free information for beginners on real estate investing.

Learn more about this author, Janeen Arshan.
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