What are REO Properties? They are also known as OREO Properties. In the banking industry REO Properties are known as Real Estate Owned (REO) or Other Real Estate Owned (OREO) not used for bank intended purposes. Bank intended purposes would be for branches, operation centers, etc. Non-bank intended purposes would be: residential real estate, commercial real estate, etc. they would have purchased back at Sheriff Sale or brought the property back in via a Deed in Lieu of Foreclosure.

When a financial institution purchases a property back at Sheriff Sale and the loan IS NOT government backed, the property will typically be handled through the financial institutions REO Department. The REO Department is sometimes handled within their commercial loan department, their collections department, or their facilities department.

Once the property has been brought back in house the REO Department will evaluate the property and determine if an eviction is needed in order to gain possession and proceed with the liquidation.

If there is a property that you are interested in and you know it is going to Sheriff Sale, you may want to make contact with the Plaintiff’s attorney and provide their office with your name and information so they can pass this information along to their client. You will want to monitor the results of the sale and make a second call to the Plaintiff’s attorney’s office to stay on top of the property. You might be able to talk to the right person at the bank who will be able to work with you on purchasing the home before it is listed with a local Realtor. I will warn you that some financial institutions will not want to work with you and may prefer you work with their local Realtors. They are busy and do not always have the time to work with the interested parties.

If you are not the successful bidder at the Sheriff Sale, you should still have the opportunity to purchase the home once it is listed with a local Realtor. Whether the loan is a FNMA, Freddie Mac or any other government backed loan, or purchased back by the bank the property will usually reappear on the market once the sale has been confirmed, the deed has transferred, the property has been cleaned out and prepared for sale.