REO stands for “Real Estate Owned” – you may have known that before…

After a lender or bank takes a property back through foreclosure it enters their REO department. Once the bank has secured the property, evicted the tenant or previous owner and taken actual possession, they will proceed to listing the property with an agent on the MLS.

Tell-tale signs (or words) of REO listings are phrases in the description such as “bank owned”, “corporate owned”, “lender owned”, but also “sold as-is”, “no warranties” or “buyer to verify all information”.

Once the proeprty shows up on the MLS anyone can make an offer on it through your own agent or through the listing agent. While REO listings are sometimes slightly lower than other similar listings, it can be hard to make this a great deal.

The key is persistence! You’ll have to make several “low-ball” offers until one sticks. It helps to get a low offer accepted if you are a cash buyer and can show proof of funds.

Many investors and rehabbers are buying properties from wholesale buyers/sellers. The wholesalers negotiate the deal and make it available to their investor/rehab buyers.

It’s a great idea to get on a wholesaler’s mailing list so you can get great deals that are “pre-negotiated” delivered to your e-mail inbox. This eliminates negotiation and a lot of paperwork on offers that won’t get accepted. All you need to do is do your due dilligence quickly and grab the deal (or better yet the other way round…)

Sign up for my wholesale list at http://cawholesaledeals.com/ (not limited to California!) – You’ll even get a free report just for signing up (and tons of great deals on a weekly basis!)