Many home buyers searching for a good deal and low prices are lured by foreclosures or pre-foreclosures. What they may not realize are the possible drawbacks and repercussions associated with bidding on a foreclosed home.

For instance, if you are the successful bidder on a property in foreclosure, you are responsible for removing the current occupants of the home. This may not be an easy feat considering they are probably angry and disgruntled that they just lost their home.

You may also not know what you are getting into because many of the homes auctioned in foreclosure are offered sold "as is" and you will probably not get to see the home before purchase. And the disgruntled previous owners may retaliate on your newly purchased bargain by trashing the place before you evict them. For example, it is not uncommon for angry sellers to smash out walls, sell appliances, and rip out the copper pipes and wiring to sell them as scrap metal.

With all that said, you may prefer to purchase an REO property. REO homes, or a real-estate owned property, are homes that are already owned by the lender. The property was acquired by the lender/bank through a failed foreclosure process. The bank ends up owning the property when nobody at the public auction bids enough to cover the amount owed against the property. There are two types of REOs: program and non-program property. A non-program property cannot be reasonably repaired or has been improved to a point that it will no longer qualify as modest under section 502 regulations. A program property is eligible for financing under the section 502 programs or one that can be reasonable repaired to be eligible. Read more about program/non-program property at http://www.rurdev.usda.gov/ga/treo.htm.

It is important to note that banks do not like holding REOs on the books and often try to liquidate them as quickly as possible. Since most markets are currently in extremely poor condition you may be able to find a great deal.

REO are often the best way to buy a distressed property for a variety of reasons:

1. The liens are already out of the picture and owned by the bank. This means you will only have to deal with the bank and the bank's agent to negotiate the transaction.
2. Taxes have been paid and settled
3. You are not subject to auction deadlines and can ultimately buy the property at your convenience.
4. REOs can be inspected before you close the deal, an option you don't have with foreclosed properties
5. Typically, REOs are restored to a sellable condition, while many foreclosures are often in dilapidated conditions.
6. Banks or lenders that own the property may allow for repairs, restorations, and financing.
7. In slow markets, you may be able to purchase an REO at a great value

More info on your stop foreclosure information search:

Get Free Foreclosure Advice and Free Refinance Quotes
Get your free on-line foreclosure refinance quote and free advice from foreclosure mitigation specialist in minutes. Compare real offers from top national subprime and hard money lenders... more...

REO Real Estate Secrets Revealed
REO is the latest buzz word in today's real estate market. REO stands for Real Estate Owned, meaning foreclosure properties which are owned by the bank. Before property can be returned to the bank, an attempt to sell it through foreclosure auction must first be made. Many real estate investors ... more...

Investing In Bank Owned Foreclosure Properties
Are you a new investor? If so, you have probably taken the first steps to being a successful investor. Now you are ready to take the final steps finding property and investing. Bank owned foreclosure property should be on the top of your list. This particular property is owned by the bank and is ... more...

What to Really Expect When Buying A Bank Owned Property
In recent years, most new buyers wanted to buy a new home from a homebuilder. Today, nearly every buyer I pre-qualify today says the same thing. ?I want to buy a bank-owned property.? In some counties around the country, foreclosures are at all-time highs. As a result, in today's market, the best ... more...

Century 21 Real Estate - Tips For Buying Bank Owned Foreclosures From Realtors
Century 21 Real Estate is a worldwide organization offering residential and commercial real estate. Century 21 Realtors are independent agents who either own a franchise office or work as a representative for the franchise owner. With the abundance of foreclosure properties, many Century 21 ... more...