11 Ways to Find REO Homes in Your Area

How do I find REO homes in my area?

If you’re new to foreclosure properties, finding REO homes might feel a little confusing at first. These bank-owned homes aren’t always grouped in one easy-to-find place. The tips below can help you start your search for REO homes in your area.

1. Find an agent who specializes in REO properties

Finding an agent who specializes in REO properties can give you an advantage throughout the process. Barnett is one of these agents. He got his start selling REO homes and continues to work with a bank, helping people buy the properties that it owns.

Often, REO properties are sold “as-is,” and many need work before they can be sold again or lived in. When he works with seasoned investors, Barnett discusses the risk and the scope of the work that the property needs. For people new to REO properties, he says that he takes a slightly different approach.

Especially if his clients are unfamiliar with REO purchases, he tries to explain certain possible challenges upfront: While some REO homes may be financed with a conventional loan, others may be more distressed and need to be purchased in cash, or potentially through a rehab loan such as an FHA 203(k) loan, a Fannie Mae HomeStyle Renovation loan, or a Freddie Mac CHOICERenovation loan.

An agent with REO experience can explain what it means if the HVAC is missing or the roof is leaking, guiding you through what you will have to fix or deal with. Barnett, for instance, will walk the property with clients (or via video) to identify things that need to be repaired or renovated.

2. Use the MLS

The MLS is a helpful place to look when you’re searching for REO homes. It often has listings that haven’t fully hit public websites yet. If you work with a real estate agent who has MLS access, you can easily search for bank-owned properties.

You can also set up alerts so you’re notified when new REO homes are listed. This can help you move faster in competitive markets where good deals don’t stay available for long. While the MLS won’t show every REO property, it can make your search a lot easier.

3. Track a foreclosure property

Some real estate portals will list pre-foreclosure and foreclosure properties as well as homes currently for sale. You can attend the auction and purchase the property, but keep in mind you’ll likely need all cash to do so.

If you’re not in a rush, you can also wait to see if the property becomes an REO home if it doesn’t sell during foreclosure. This is a good way to approach the purchase if you don’t want to deal with the foreclosure process.

4. Go to an auction website

Auction websites may have a dedicated section for REO homes. Auction.com, for instance, allows you to browse properties by entering your preferred location and then using the “asset type” filter to narrow down your search.

5. Head straight to a bank’s website

Banks, especially larger banks like the Bank of America, will have a dedicated portion of their website dedicated to the REO properties they are trying to sell. They also work with listing agents to list the property, and these agents can help walk you through the process if you find one you want to buy.

6. Search government foreclosure sites

• U.S. Department of the Treasury: The Real Property Auctions platform features properties that have been seized and forfeited due to violations of federal laws. The proceeds for any sales go to the U.S. Treasury Asset Forfeiture Fund, which helps support law enforcement efforts and provides restitution to crime victims.
• U.S. Marshals Asset Forfeiture Program: This program also helps with compensating and restoring property to victims and may offer you a deal.
• Federal Deposit Insurance Corporation (FDIC): If a bank fails, the FDIC will often take control of the bank’s assets, either selling them to another bank or selling them to someone else, like you. The FDIC’s Real Estate and Property Marketplace sells real estate retained from failed banks.
• U.S. Department of Housing and Urban Development (HUD): This government agency has an open data tool that helps people look through information about government-owned homes. It shows maps and details of FHA REO properties, which are homes that HUD takes back after a foreclosure on an insured loan.

Other federal agencies where you can find single-family homes include the Internal Revenue Service (IRS), the U.S. General Services Administration’s Real Property Utilization & Disposal, and the United States Department of Agriculture (USDA). Some of these sites also include multi-family housing, land, and commercial real estate.

7. Get to know Fannie Mae and Freddie Mac

Fannie Mae and Freddie Mac are government-sponsored enterprises that buy loans from banks, sometimes holding onto them, and sometimes repackaging them in mortgage securities and selling those on the secondary market.

When a home loan that Fannie or Freddie is holding goes into foreclosure, and the house doesn’t sell at a foreclosure auction, those Fannie Mae- and Freddie Mac-owned homes are then sold through the sites HomePath and HomeSteps, respectively.

8. Pay for a specialty site subscription

Sites like RealtyTrac and RealtyBid provide a database of foreclosure properties. You can use these sites to find properties in foreclosure and then track them to see whether they sell or later become REO homes.

9. Search public records and check for sheriff’s sales

Your local sheriff’s website should have a space that lists upcoming sheriff’s sales, which can include foreclosure properties that could become REO properties if they don’t sell. These auctions can be a great way to monitor distressed properties before they officially become bank-owned.

Checking public records at your county clerk’s office can also provide insight into foreclosure filings and upcoming sales. Some states require public notice of foreclosure auctions, so local newspapers or government websites may have useful listings. Staying informed about these sales can give you a head start on identifying potential REO properties in your area.

10. Take a drive through town

If you want to be really proactive, you can drive around town and look for abandoned or vacant homes. Then, you can do some digging to find out who owns the home using the county’s website, though some are easier to use than others.

Some apps, like onX, which is geared toward outdoor adventures, will also give you the property owner’s name. Once you know the owner’s name (which will sometimes be the bank), you can track the property’s status and monitor whether it goes into foreclosure or becomes an REO property.

11. Ask around and put out some feelers

Sometimes, the best tool is your existing network. If you let people know that you’re looking for an REO property, they may hear some information that they wouldn’t normally pay attention to and be able to give you a lead.

You can also work with a real estate agent and let them know what you’re looking for. If they already work with a bank, they can really help you out, or they may be able to do some of the legwork for you.

Step-by-step process for buying an REO property

Buying an REO property can feel a little unfamiliar at first, especially since banks tend to handle these sales a bit differently than traditional home transactions. Knowing what to expect can help you plan your next steps and avoid surprises along the way. 

Here’s a simple breakdown of the step-by-step process for purchasing an REO property:

• Get preapproved: Getting preapproved for a mortgage helps you know how much you can afford before you start shopping for REO homes. It also demonstrates stronger financial readiness to sellers and allows you to move more quickly when you find a property you wish to purchase.
• Find REO listings: Start searching for REO listings on real estate websites, auction platforms, and bank-owned property portals. Since these homes can be scattered across different sources, checking multiple places increases your chances of finding good opportunities. 
• Work with an REO-experienced agent: A real estate professional who has experience with REO properties can help you understand how bank-owned sales work. They can also help you avoid common mistakes and guide you through paperwork and negotiations. 
• Submit an offer: Once you find a property you like, your agent will help you submit an offer to the bank or listing agent. REO offers may include additional paperwork compared to traditional home sales, so accuracy is important. 
• Wait through the bank review period: After submitting an offer, the bank will review and decide whether to accept, reject, or counter your offer. This process can take longer than traditional home sales because banks often evaluate multiple offers at once. 
• Complete an inspection: A home inspection is important for REO properties because these homes are often sold as-is. An inspection helps you understand potential repair costs and decide if the purchase is still worth it. 
• Conduct a title search: A title search helps confirm there are no outstanding liens, ownership disputes, or legal issues tied to the property. This step is important because it protects you from inheriting unexpected legal or financial problems.
• Secure financing approval: After the offer is accepted, you’ll work with your lender to finalize your loan approval. Staying in close communication with your lender helps avoid delays before closing. 
• Finish the closing process: The closing process involves signing documents, paying closing costs, and officially transferring ownership. Once everything is complete, you’ll receive the keys and officially own the property.

Smart search for the dream REO home

Finding REO homes can require extra effort, but the potential savings can make the search worthwhile. These properties can offer better pricing or negotiation opportunities if you move quickly when good listings appear.

The key to making the process less stressful is to stay patient, check multiple sources, and work with the right professionals. When you’re ready to start your search, consider partnering with a trusted agent through HomeLight to help you find the best REO opportunities near you.

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