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Want To Know The True Definition Of A Maryland REO?

There are some acronyms in the English language that have grown so familiar that they are more like words than the phrases they represent (think “SCUBA for self-contained underwater breathing apparatus or “LASER” for light amplification by stimulated emission of radiation).  Maryland REO properties aren’t in that category yet.  However, even though most people have never heard of REOs, they are very familiar with what they stand for.

REO is the acronym for ‘Real Estate Owned,’ but even that doesn’t help (every bit of real estate is owned, for Pete’s sake!)


In case you are thinking that REO looks a lot like OREO, and that it could have something to do with the U.S.’s most popular cookie, you are closer to the truth than you might first imagine.  REO is shortened from a financial term used by banks: “Other Real Estate Owned” – OREO – meaning real estate that is owned by the bank… but not directly connected to its banking business.

Which is very much on point for what Maryland REO opportunities represent. Although its ownership has reverted to the bank which issued a mortgage loan for it, a Baltimore REO is in a kind of Cinderella situation.  The REO may not have to clean the bank’s floors at night, but its new owner likes all its other investments better.  The bank probably tried to sell the thing at auction, but got nowhere.  The bank isn’t at all pleased with the situation.  As the OREO designation indicates, it’s not directly connected with the bank’s “bankiness”.  Like a cat trying to shake water off its paw, the bank wants to get rid of it… be done with it… lose it!

Enter the essence of a Maryland REO opportunity.  It’s a home with an owner who wants to sell it QUICKLY!!!  Banks are simply some of the most motivated sellers in the marketplace.

Then again… the pure essence of what the bank does best is to make money.  It lent some to the former owners, and now it’s taking in zero from the monthly payments that aren’t happening.  So although, like the cat with the wet paw, they’d like to shake the whole thing off, they’d still also like to get back as much money as possible.


Enter the essence of the hitch in the REO opportunity.

If you are a potential home buyer who is a true bargain hunter, one of the local REO properties could be of interest.  You then have to go on a hunt to find one. You can try contacting lenders and asking them for a list of their REO properties, but that is a complete time-waster, remember from the essence of the definition of REO, it’s just Real Estate Owned by the bank, but not a part of their TRUE business.  The banks hire agents to sell them, so working with a experienced real estate agent is always more reliable, especially one that has sold REO properties in the past because an REO deal is different in many respects to a traditional sale.  Then you have to be prepared for today’s REO realities.  Gone are the scads of REOs that flooded the market after the financial meltdown.  Today, banks are likely to have established an asking price that is reasonable rather than spectacularly low.  Your agent will help assemble comparable property prices to aid evaluation.  Too, because buying an REO is an “as is” transaction, you will benefit from working with a team of experts (Realtor®, lawyer, perhaps a contractor) who can work to protect your interests.

Local REO opportunities can be terrific finds – and so can others that involve less complication.  There is one sure way to investigate the values that are out there: Simply turn to ExecuHome Realty and let us examine and identify what properties are truly available, and even more, which ones represent the best value.  Contact us at 443-632-3800, we can’t wait to help you! We are Maryland’s Own Real Estate, born in 2005, and home to over 350+ of the state’s best and experienced Realtors.





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