Many people aren't aware of term called Real Estate Owned (REO). This can actually turn out better than a foreclosure. First, a bit of background on what Real Estate Owned means. This essentially is the status of a property when the bank has tried to sell off through auction, a foreclosed property. The bank is even more motivated to get this off its books because it is basically a dead, or non-performing asset.
How do you go about finding real estate owned properties? You could talk to banks. They often have a department that handles these types of properties. But this is an extremely time consuming task. You will need to look through lists upon lists and go to different banks because they will all have a different list.
There are several services available today that can sell you foreclosed lists. But many of them don't make Real Estate Owned properties available. So you are left with the first option of finding Real Estate Owned properties from the bank. And as I have stated, this is incredibly inefficient. What's needed is a service that can provide you with a list of Real Estate Owned properties as well as the foreclosures. As I have suggested before, if you can find some Real Estate Owned properties in your area the banks are much more desperate to get rid of these so you should be able to create a contract with the bank that was returned from the listing.
The fact that you are reading this article may suggest that you were not familiar with this type product. Many people are not and that is an advantage to you. Most people will focus on foreclosed listings and will completely bypass this special type of status. Another great feature is that the bank that has the property will not ask for too much up front. They will ask you to put up an earnest money deposit. But depending on your closing date and the value of the property, etc., it could be as low as $5000.
There are a few things to be aware of before embarking on finding Real Estate Owned properties. The banks may use the property as a means to get a loan out of you. If they do, just make sure it is a good deal. Sometimes banks will require the owner to occupy the property. You need ask many questions about the terms of the deal before going through with anything.