Foreclosure vs REOs: Is there a Difference?

Foreclosures and REO property question – “What is the difference between a foreclosure property and REO (real estate owned)?

A foreclosure is a legal process in which, against the wishes of the owner, real property is sold to satisfy a public or private debt for which the real property has been pledged as security.

Real Estate Owned (REO) is real property that has been foreclosed by a lender and is now owned by the lender.

There’s a lot of confusion between a foreclosure and REOs. When real estate buyers call me asking about foreclosures in most instances, they are really inquiring about REOs and here’s why?

A foreclosure property goes through a foreclosure auction which is usually held on an assigned date on the steps of a local court house.
Foreclosure property buyers need to be able to purchase the property for ALL CASH.
Foreclosure property buyers inherit all unpaid liens, including mortgage debt, taxes, construction loans, home equity lines of credit, and possibly a second or third mortgage.

On the other hand, an REO property is:

REO property is already owned by the bank.
Home buyers are able to get a regular mortgage or loan on that property. All cash is not needed.
REO properties in most instances come with clear title.

Five things to look for when purchasing REO or already foreclosed homes:

Work with your Pasadena realtor and the Title Company representative to ensure that the title to the Pasadena home you’re buying is free and clear.
Understand that most foreclosures occur in a down-trending market. Factor in falling home prices into your purchase offer. Look at the current local market conditions and historical trends prior to submitting your offer to the bank.
Banks do NOT provide many disclosures, so be prepared for surprises. Ensure that all home inspections are completed – don’t forget a sewer line inspection – prior to close of escrow.
Look for neighborhoods that are not overrun with foreclosures. Neighborhoods with many foreclosures might offer better prices, but will take a lot longer to turn around and the home prices will continue to depreciate.
If you are looking to buy an already foreclosed property as an investment, be aware that lenders charge higher interest rates on 2nd homes and investment property. Speak to a lender and get fully approved prior to making an offer.

Below is a map and a list of REOs or already foreclosed homes in San Gabriel Valley including Pasadena and surrounding cities:

Showing properties 1 - 50 of 158. See more Foreclosures.
(all data current as of 9/2/2010)

$127,900 : 360 West Avenue 26 ,Unit 411, Los Angeles

0 beds, 1 full bath

Size: 630 sq ft

Lot size: n/a

Year built: 2006

Parking spots: n/a

Walk Score™: 68
$159,000 : 4454 Turquoise Street, Los Angeles

2 beds, 1 full bath

Size: 1,240 sq ft

Lot size: 7,500 sq ft

Year built: 1909

Parking spots: n/a

Walk Score™: 40
$160,000 : 5820 Benner Street ,Unit 304, Los Angeles

2 beds, 2 full baths

Size: 753 sq ft

Lot size: 2,269 sq ft

Year built: 1979

Parking spots: 2

Walk Score™: 77
$160,000 : 3512 Sierra Street, Los Angeles

2 beds, 2 full baths

Size: 1,065 sq ft

Lot size: 5,096 sq ft

Year built: 1923

Parking spots: 2

Walk Score™: 34
$164,000 : 5036 Echo Street ,Unit 3, Los Angeles

2 beds, 1 full, 1 part baths

Size: 992 sq ft

Lot size: 1,393 sq ft

Year built: 1984

Parking spots: n/a

Walk Score™: 68
$165,000 : 3556 Sierra Street, Los Angeles

2 beds, 1 full bath

Size: 786 sq ft

Lot size: 4,996 sq ft

Year built: 1924

Parking spots: n/a

Walk Score™: 37
$174,900 : 4750 Templeton ,Unit 1111, El Sereno

1 beds, 2 full baths

Size: n/a

Lot size: 1,259 sq ft

Year built: 1995

Parking spots: n/a

Walk Score™: 58
$174,900 : 4053 Van Horne Avenue, Los Angeles

1 beds, 1 full bath

Size: 901 sq ft

Lot size: 5,184 sq ft

Year built: 1937

Parking spots: n/a

Walk Score™: 62
$179,900 : 218 North Avenue 61, Los Angeles

2 beds, 1 full bath

Size: 690 sq ft

Lot size: 1,500 sq ft

Year built: 1910

Parking spots: n/a

Walk Score™: 85
$182,800 : 430 North Holliston Avenue ,Unit 201, Pasadena

1 beds, 1 full bath

Size: 683 sq ft

Lot size: n/a

Year built: 1988

Parking spots: 1

Walk Score™: 77
$184,900 : 4755 Templeton Street ,Unit 2103, El Sereno

3 beds, 2 full baths

Size: 1,228 sq ft

Lot size: 1,259 sq ft

Year built: 1995

Parking spots: 2

Walk Score™: 58
$185,000 : 4750 Templeton Street ,Unit 1322, El Sereno

2 beds, 2 full, 1 part baths

Size: 1,108 sq ft

Lot size: 1,259 sq ft

Year built: 1995

Parking spots: 2

Walk Score™: 58
$190,000 : 5920 Marmion Way, Highland Park

2 beds, 1 full bath

Size: 588 sq ft

Lot size: 2,250 sq ft

Year built: 1920

Parking spots: 1

Walk Score™: 91
$193,000 : 4719 Grey Drive, Los Angeles

3 beds, 1 full, 1 part baths

Size: 1,174 sq ft

Lot size: 4,878 sq ft

Year built: 1925

Parking spots: 1

Walk Score™: 57
$199,900 : 35 El Nido Avenue ,Unit 7, Pasadena

1 beds, 1 full bath

Size: 718 sq ft

Lot size: 1,742 sq ft

Year built: 1967

Parking spots: n/a

Walk Score™: 75
$199,900 : 4360 Huntington Drive, Los Angeles

3 beds, 1 full bath

Size: 850 sq ft

Lot size: 6,185 sq ft

Year built: 1908

Parking spots: n/a

Walk Score™: 37
$199,900 : 1339 West Temple Street, Los Angeles

2 beds, 1 full bath

Size: 1,154 sq ft

Lot size: 3,964 sq ft

Year built: 1904

Parking spots: n/a

Walk Score™: 82
$206,700 : 4121 Mercury Avenue, Los Angeles

3 beds, 1 full bath

Size: 884 sq ft

Lot size: 4,356 sq ft

Year built: 1922

Parking spots: n/a

Walk Score™: 42
$210,000 : 760 Elmira Street ,Unit 4, Pasadena

2 beds, 1 full bath

Size: 644 sq ft

Lot size: 2,400 sq ft

Year built: 1928

Parking spots: 1

Walk Score™: 77
$212,100 : 285 South Sierra Madre Boulevard ,Unit D, Pasadena

1 beds, 1 full bath

Size: 729 sq ft

Lot size: 871 sq ft

Year built: 1984

Parking spots: 1

Walk Score™: 74
$215,500 : 898 Temple ,Unit 222, Los Angeles

2 beds, 1 full bath

Size: 924 sq ft

Lot size: 2,736 sq ft

Year built: 1980

Parking spots: 1

Walk Score™: 35
$219,000 : 310 East Edgeware Road, Los Angeles

5 beds, 3 full baths

Size: 1,320 sq ft

Lot size: 4,356 sq ft

Year built: 1919

Parking spots: n/a

Walk Score™: 69
$219,900 : 1146 East Lexington Drive ,Unit 205, Glendale

2 beds, 1 full bath

Size: 1,046 sq ft

Lot size: n/a

Year built: 1969

Parking spots: n/a

Walk Score™: 85
$219,900 : 2860 Budau Avenue, Los Angeles

3 beds, 2 full baths

Size: 1,172 sq ft

Lot size: 6,534 sq ft

Year built: 1965

Parking spots: 4

Walk Score™: 52
$220,000 : 2342 Birkdale Street, Los Angeles

1 beds, 1 full bath

Size: 622 sq ft

Lot size: 4,830 sq ft

Year built: 1925

Parking spots: n/a

Walk Score™: 38
$220,000 : 316 North Avenue 54, Los Angeles

5 beds, 4 full baths

Size: 1,737 sq ft

Lot size: 5,074 sq ft

Year built: 1913

Parking spots: 3

Walk Score™: 77
$224,800 : 500 Jackson Place ,Unit 105, Glendale

2 beds, 1 full, 1 part baths

Size: 956 sq ft

Lot size: 622 sq ft

Year built: 1973

Parking spots: 2

Walk Score™: 71
$225,500 : 5049 San Rafael Avenue, Los Angeles

3 beds, 0 baths

Size: 998 sq ft

Lot size: n/a

Year built: 1922

Parking spots: n/a

Walk Score™: 58
$228,900 : 1550 Stadium Way ,Unit 9, Los Angeles

2 beds, 1 full, 1 part baths

Size: 1,225 sq ft

Lot size: 1,424 sq ft

Year built: 1975

Parking spots: 1

Walk Score™: 74
$229,700 : 5042 O Sullivan Drive, Los Angeles

3 beds, 2 full baths

Size: 1,196 sq ft

Lot size: 4,800 sq ft

Year built: 1929

Parking spots: n/a

Walk Score™: 58
$237,500 : 121 Sinclair Avenue ,Unit 240, Glendale

2 beds, 2 full baths

Size: 959 sq ft

Lot size: 871 sq ft

Year built: 1973

Parking spots: 2

Walk Score™: 68
$242,900 : 5746 Omaha Street, Los Angeles

3 beds, 1 full bath

Size: 818 sq ft

Lot size: 3,430 sq ft

Year built: 1922

Parking spots: n/a

Walk Score™: 75
$244,900 : 4260 Via Arbolada ,Unit 118, Los Angeles

2 beds, 2 full baths

Size: 1,033 sq ft

Lot size: n/a

Year built: 1985

Parking spots: 2

Walk Score™: 31
$244,900 : 801 North Summit Avenue, Pasadena

3 beds, 2 full baths

Size: 1,102 sq ft

Lot size: 16,927 sq ft

Year built: 1894

Parking spots: 2

Walk Score™: 80
$249,900 : 3512 Chadwick Drive, El Sereno

3 beds, 2 full baths

Size: 1,224 sq ft

Lot size: 6,665 sq ft

Year built: 1912

Parking spots: n/a

Walk Score™: 63
$249,900 : 5252 Buchanan Street, Los Angeles

2 beds, 1 full bath

Size: 710 sq ft

Lot size: 4,792 sq ft

Year built: 1926

Parking spots: n/a

Walk Score™: 83
$249,900 : 420 James Street, Los Angeles

2 beds, 2 full baths

Size: 560 sq ft

Lot size: 3,400 sq ft

Year built: 1927

Parking spots: 3

Walk Score™: 66
$249,900 : 5065 Lynnfield Street, Los Angeles

4 beds, 2 full baths

Size: 1,475 sq ft

Lot size: 4,356 sq ft

Year built: 1955

Parking spots: n/a

Walk Score™: 45
$249,900 : 504 South Euclid Avenue ,Unit 5, Pasadena

1 beds, 1 full bath

Size: 598 sq ft

Lot size: 1,307 sq ft

Year built: 1961

Parking spots: n/a

Walk Score™: 71
$258,000 : 4589 Via Marisol ,Unit 261, Los Angeles

2 beds, 1 full bath

Size: 1,025 sq ft

Lot size: 2,735 sq ft

Year built: 1981

Parking spots: n/a

Walk Score™: 35
$259,900 : 4865 Druid Street, Los Angeles

3 beds, 2 full baths

Size: 1,077 sq ft

Lot size: 5,400 sq ft

Year built: 1957

Parking spots: 2

Walk Score™: 48
$259,900 : 3834 Homer Street, Los Angeles

2 beds, 1 full bath

Size: 1,114 sq ft

Lot size: 4,440 sq ft

Year built: 1940

Parking spots: n/a

Walk Score™: 54
$260,000 : 262 North Westlake Avenue, Los Angeles

2 beds, 1 full bath

Size: 1,091 sq ft

Lot size: 3,000 sq ft

Year built: 1913

Parking spots: n/a

Walk Score™: 75
$269,000 : 307 East Woodbury Road, Altadena

2 beds, 1 full, 1 part baths

Size: 1,008 sq ft

Lot size: 4,726 sq ft

Year built: 1923

Parking spots: n/a

Walk Score™: 57
$269,900 : 2721 Commodore Street, Los Angeles

4 beds, 2 full baths

Size: 1,668 sq ft

Lot size: 4,500 sq ft

Year built: 1922

Parking spots: n/a

Walk Score™: 32
$269,900 : 337 North Belmont Street ,Unit 112, Glendale

2 beds, 2 full, 1 part baths

Size: 946 sq ft

Lot size: 871 sq ft

Year built: 1992

Parking spots: 2

Walk Score™: 94
$274,900 : 525 Meridian, Los Angeles

2 beds, 1 full bath

Size: 1,040 sq ft

Lot size: 4,600 sq ft

Year built: 1922

Parking spots: 1

Walk Score™: 65
$274,900 : 5119 Chester Street, Los Angeles

3 beds, 1 full bath

Size: 988 sq ft

Lot size: 5,141 sq ft

Year built: 1954

Parking spots: 1

Walk Score™: 51
$274,900 : 3961 Via Marisol ,Unit 331, Los Angeles

2 beds, 2 full baths

Size: 1,350 sq ft

Lot size: n/a

Year built: 1982

Parking spots: n/a

Walk Score™: 29
$274,900 : 5010 Axtell Street, Los Angeles

2 beds, 1 full bath

Size: 1,118 sq ft

Lot size: 7,753 sq ft

Year built: 1911

Parking spots: n/a

Walk Score™: 65