Lender Owned Properties

Also known as REO's, bank owned properties are the result of a foreclosure.  The bank has taken over the property and now needs to sell it.  They have a lot more that they haven't even released on the market yet.  They are obviously overwhelmed.  When the bank decides to dump one of their foreclosures, they get an appraisal and then put the home on the market at a 10-20% discount.   So, these are tremendous deals for buyers.  Of course, this will have a negative effect on the value of the other homes in the neighborhood. Since they have already marked it down so much, they are not very negotiable.  With the marked down price, they often get multiple offers and end up with more than the low list price.  Unlike short sales, where the homeowner still owns the property, the banks will respond to purchase offers on their REO's very quickly.  Once the bank owns the property, they are very motivated to get rid of it quickly.  They usually claim that they will not make any repairs, but we are starting to see differently.  So far, REO's account for only about 2-3% of the active Charleston market.  However, they make up about 8-10% of the properties under contract. We certainly expect these percentages to climb.