FORECLOSURE ADVICE: Real Estate Owned 101

What is a Real Estate Owned (REO) property?

by Brian Schartz

Brian Schartz
is a Real Estate owned listing agent. Brian has been a Realtor for over 20 years now. In addition to having a membership in the Eugene Association of Realtors, he is also a member of the US Chess Federation, American Mensa and the National Marrow Donor Program.



Real estate owned or REO is a term used in the United States to describe a class of property owned by a lender—typically a bank, government agency, or government loan insurer—after an unsuccessful sale at a foreclosure auction.

If you decide to have your agent write an offer on an REO listing there are a few things that you can do to help ensure that your offer is presented to the seller in an expedient manner. With the inventory of listings expected to remain low this year, it is best to minimize delays between the time the offer is signed and the time the seller reviews it. Below are a few of the reasons that an offer is not promptly presented to the seller.

  •  The buyer’s name on the contract, i.e., John Smith, does not match the name on the lender letter, i.e., John A. Smith.
  • The buyer’s signature and / or initials do not match the name on the contract. For example, JAS and John Smith.
  •  Failure to include the buyer’s address, telephone number and e-mail address in the contract (usually the second to the last page on the Oregon Residential Real Estate Sale Agreement).
  •  Failure to inform the seller whether you intend to occupy the property or whether you intend to purchase it as an investment.

These items may seem trivial to some buyers but they can cause delay in getting an offer submitted which lengthens the opportunity for another offer to come in to compete.

So, make sure that there is consistency:

  • Ask your agent to include your address, telephone number and e-mail address in the contract.
  • Ask your agent to convey to the listing agent your intentions to either occupy the property or purchase it as an investor. This can be done either in an email or it can be noted in the contract of the Additional Provisions section.


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