Real estate owned (REO) properties can be wise investments for the smart investor. Buying discounted properties is often a complex process. Some sales agents are experienced in completing these property transactions and can be a great help to buyers. For instance, the sales agent can identify REO properties, help the buyer prepare paperwork, and offer advice about how to negotiate with the bank throughout the REO transaction process. Buyers should learn as much as possible about how to buy foreclosures or bank-owned properties before committing capital. Even a modest amount of research can help the buyer avoid frustration and paying too much on an REO property.

Banks and Negotiation

Some banks will negotiate on REO properties. The experienced sales agent can help the prospective buyer to assess certain criteria prior to an attempt to negotiate a better sales price. The property’s location, its condition, and the number of prospective buyers for the property all count to the bank. For instance, if the property is in good condition but miles away from the center of town, or it’s in a less than desirable school district, fewer buyers are likely to bid on it. The bank may be willing to accept a lower price if the buyer has cash in hand.


Successful negotiation requires the ability to understand the other party’s perspective. The buyer must understand what the bank is thinking. If a property has been on the market substantially longer than the bank believes it should, they may become concerned about losing money on their investment. They want to liquidate such a property as soon as possible.


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