If you've recently been looking at the housing market or even considered the purchase of a home, no doubt you've heard the word "foreclosure." It's an okay word... it'd score you 16 points in a game of Scrabble, 19 points in Words with Friends and a whole mess of heartache if it ever happens to you.
After a property is foreclosed upon, the Bank will try and recoup as much of the loan amount lost as possible. This is typically done at a foreclosure auction, and in Texas it occurs on the first Tuesday of the month, or what is commonly referred to as "Super Tuesday." Visit your local county court steps bright and early that morning and you'll see what I'm referring to.
If it cannot be sold at the "Super Tuesday" auction (usually for the amount owed, which is often times more than what it's valued), the bank will legally take repossession of the property. The home is then marked as a non-performing asset and is generally then called ‘REO' or ‘Real Estate Owned' by those that have dealings with it during it's tenure as an unoccupied property - realtors, asset managers, title reps, preservation specialists, lenders, etc.
Once a property is REO, a slew of steps begin in the securing, prepping and marketing of the asset to try and regain the loss of the loan default.
So, next time you hear the term "REO," you now know that it's a commonly used synonym for ‘foreclosed home.' Take that little tidbit to your next cocktail party conversation.
Ashley Cox is a Realtor® with Dallas City Center Realtors and strives to provide excellent service and assistance to Buyers and Sellers in the Dallas/Fort Worth Metroplex. If you are in the market to buy or sell and need the assistance, guidance and support of a professional, call (972) 978-3109 today.
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