"REO" stands for Real Estate Owned. These are homes which have completed the foreclosure process and are now owned by the bank or mortgage company. This is not the same as a property up for foreclosure auction. 
When buying a property during a foreclosure sale, you may have to pay at least the loan balance plus interest and fees accumulated during the foreclosure process. Each case is different. The bank may decide to let it go for less. The property is sold completely "as is". That might include standing liens and even current residents that need to be evicted, in which case local law prevails.
A bank-owned property, conversely, is a much cleaner and attractive deal, in most cases. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The bank will deal with the removal of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing. Joanne will always recommend the buyer also have a qualified title company complete a search on the property to assure clear title, in some cases this may involve the title company's underwriter, the cost may be as little as $75 and is well worth it.
You should be aware that REOs may be exempt from typical disclosure requirements. In California, for example, banks do not have to give a Transfer Disclosure Statement, a document that typically requires sellers to tell you about any defects of which they are informed. By hiring Joanne Trugman @ Future Home Realty, you will know all parties are fulfilling Florida state disclosure requirements. It has become quite common for the "bank owners" to state they do not know anything about the property and supply no disclosure documents, and in most cases, they do not have the knowledge.
Are REO properties a bargain in the Tampa Bay Area ?
It's commonly believed that any REO must be a good deal and a chance for easy money. This frequently isn't true. You have to be cautious about buying a REO if your intent is to make money off of it. Even though the bank is usually anxious to offload it soon, they are also looking to get as much as they can for it.
When contemplating the value of a foreclosure, you need to look closely at comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale. The bargains with money making potential exist, and many people do very well buying and selling foreclosures. However there are also many REOs that are not good buys and may not be money makers.
Prepared to make an offer?
Most lenders have staff dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will usually contract with a listing agent.
Prior to making your offer, you'll want to discover as much as you can about what they know regarding the condition of the property and what their process is for accepting offers. Since banks almost always sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unknown damage and cancel the offer if you find it. Documentation showing your ability to pay, such as a pre-approval letter from a lender, must be submitted with your offer.
After your offer is presented, you can expect the bank to respond with a counter offer. At this point it will be your choice whether to accept their counter, or submit another counter offer. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. This process can be time consuming and patience is required. Joanne will keep in touch with the listing agent and keep you informed.
