How to Find Bank-owned Properties

Bank owned - REO

Real estate-owned properties (REO) represent a significant investment for real estate investors and anyone looking to get a new property. Buying these houses is not as easy as getting a common property, so you need to know how the foreclosure process works to learn when you can invest in these properties and what your financing options are.

Although it doesn’t happen at all times, you can get a discount for real estate-owned properties if you meet certain conditions. Buying a bank-owned house has some advantages and disadvantages you should consider before making a rash decision. Keep in mind not everyone is fit for buying foreclosed properties, so you should analyze your financial status and goals when thinking about it.

One of the issues of getting foreclosures and real-estate-owned properties is that finding them is not as easy as looking for regular houses. Fortunately, we are here to help you. Read this page to know where to find bank-owned homes!

What Is a Real Estate-owned or Bank-owned Property?

Real estate-owned properties are foreclosed homes that weren’t sold on auctions. However, to understand what a bank-owned property is, you need to know what the foreclosure process consists of. When a homeowner can’t make mortgage payments, their property can become a foreclosure.

Foreclosures are meant to help the mortgage lender recover a part of their lost investment, so the main goal of the process is to sell the property. That’s done through an auction where everyone can bid to get the house, and since these properties are sold below market value, many buyers are interested in them.

The foreclosure auction is not always enough to sell distressed properties, so those houses become bank-owned properties. Many people get confused with that term since they are also called real estate-owned properties; they are the same thing, though. 

When a bank-owned home goes to the bank’s inventory, the lender can sell it to anyone who wants to buy it. Although an auction is not needed for that, lenders need to get a significant number of permissions to buy bank-owned homes. Buying houses tends to be less complex when getting them from another person, but the process gets more challenging when the bank is the one managing everything.

Banks need to approve every part of the purchase process before lenders can accept any kind of money from buyers, so the purchase process lasts long. Other buyers can make offers for the same bank-owned property you want to get.

Is Buying an REO Property a Good Idea?

The correct answer is that it depends. Buying a bank-owned property has pros and cons, so you need to analyze if there’s any major setback that could keep you from getting the property. Bank-owned properties are sold “as is,” and that includes all needed repairs the property may require, for starters.

Take into account that the owner of the house is now the bank or mortgage lender, and neither of them was living in the property you are trying to buy. That means you are practically blindfolded when buying a bank-owned property. If you contact an experienced real estate agent to help you with everything, they may ask you to run a home inspection on the place.

Sometimes a loan debt or the money you owe to something or someone can get out of control, so investing is a wise decision when you invest in things you like.

Speaking about the good part of buying a bank-owned home, you have the price. Investors tend to look for a foreclosure every now and then because lenders commonly offer good deals for them, selling them below market price.

Bank-owned REO properties are not sold that way, but often have discounts due to the repair work the properties often need. However, whether you get a good deal or not depends on how you or the real estate agent representing you negotiates with the bank.

Regardless of that, don’t expect the bank to do anything to repair any damage the REO home has. Try requesting something below the asking price stating that you need to spend most of your investment in repairs. Take into account that a bank-owned home is a property that no one wanted to auction for, so not all of them connect buyers that effectively.

Where Can I Find Bank-owned Properties?

Getting to the main part of this list, it’s time to know where you can get an REO property. Even though it’s not that difficult to find a bank-owned home if you know where to look, it’s a difficult task if you don’t.

Furthermore, not finding the right REO properties to invest in is one of the worst struggles an investor can have. It delays all their plans and can make them change their mind about investing in an REO property.

Now that you’ve read this page, you don’t have to go through that kind of nuisance anymore. Below you can find the easiest ways to find REO properties!

Bank Websites

Most banks have active online pages that show you updated pre-foreclosure, foreclosure, and bank-owned REO properties listings.

Those listings include all the information you need before buying a bank-owned home. That’s excellent for people in search of an REO property but who don’t know where to look. However, not all banks offer that option, so you need to look for one that is reliable and friendly to real estate investors.

Bank of America is one of the banks that offer REO listings, but since it’s a popular institution worldwide, it receives multiple offers each day. That’s the only problem with looking for bank-owned homes this way.

Real Estate Agents

If you are looking forward to buying a bank-owned REO property, why not do it with the help of an expert on the matter? A real estate agent is used to dealing with banks and also knows perfectly how the mortgage and purchase process works. They can also tell you what the market value of a foreclosed property is to help you compare it with others.

However, the best part of hiring a real estate or buyer’s agent to find a real estate-owned REO property for you is that they can access the Multiple Listing Service (MLS). The MLS is a network only available to real estate agents that shows them every foreclosure sale and REO property available for them. That information tends to come along with the real estate-owned REO property’s price. In case of an ongoing foreclosure, it tells them how much the mortgage loan is worth and some information about the lender.

Regardless of the lender you contact, they can ask for more money depending on the deal, so take that into account when investing in bank-owned homes. Apart from that, these agents can make all the negotiations needed for you. Naturally, paperwork is also handled by them.

When hiring a real estate agent to find REO properties for you, make sure to remember to pay them their fee; not considering these fees while planning your budget can cause you severe issues in the future. This option is perfect for people who don’t understand how bank-owned homes work; if that’s your case, make sure to save the money for it.

Real Estate Listing Websites

Any buyer in search of REO properties can look for them on real estate listing websites. Since these websites are public, you can look for all the information you need without asking another person to do it for you.

Real estate agents always lead these kinds of websites. You can always contact them if you need more information about the lender. 

Public Records

As it happens with listing websites, you are always free to look for bank-owned homes listings by yourself by going into the county’s records office. Official government departments are in charge of keeping those listings updated, so all the information you get from them is reliable.

If you are a potential buyer and are willing to pay what the lender is offering, you have to contact them to make all the arrangements needed with the bank.

Although the buying process is completely different when comparing foreclosures and regular properties, they share some characteristics. You should get a pre-approved for mortgage to show the bank you are a qualified and reliable buyer, for example.


Although it’s not that common to see this, some newspapers show the pre-foreclosure, foreclosure, and REO properties available in specific zones. If you like reading newspapers, looking for these properties can even become a hobby for you!

Wrapping Up

When a lender sells an REO house, they may not be willing to sell it for a lower price. That’s because they want to recover from a lost investment, and unlike foreclosures, they don’t have to lower the property’s price.

Fortunately, most lenders give discounts if the property they are selling needs a lot of repair work. As the buyer, you have the right to negotiate and get to an agreement with the lender. Take into account that this process can last a long time.

Try any of the options listed before if you are looking forward to investing in a bank-owned property!

C.L. Butler

C.L. Butler

I wholesale and flip in my home market of Indianapolis. I've developed some great relationships with people all over the world that I wouldn't normally be exposed to if it wasn't for the power of real estate.

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I’m a real estate investor with a passion for technology. by leveraging technology and services you can reach your financial and business goals quickly and efficiently 

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