Find the owner

• Most REO properties are listed with a real estate broker and it may be difficult to find out who the actual trustee or decision maker is.
• Many servicers assign properties to asset managers located all over the country. 
• Check the Find Property page in this section for links to REO property listings for the major servicers.

Inspect the property

• REO properties are usually sold as is, so a thorough inspection is necessary to estimate the rehabilitation costs. 
• Software programs like Housing Developer Pro allow you to print inspection forms and work from a set of standard rehab specifications to help you accurately estimate rehab costs. 
• Be on the lookout for issues common to REO properties: Vacant homes may have water damage and siding or copper fixtures may have been stripped. 
• Document your findings with a digital camera or video camera; even a cell phone camera will do.

Do a title search

• Search the public records for outstanding liens.
• A title company can run a full, insured title search for a fee.
• Look for second liens, unpaid taxes, or unpaid contractors (called a mechanic's lien).  These liens remain intact until they are repaid, by the former or current owner. 
• Sellers should clear the title before the sale, but never assume this is the case.  Title issues can hold up the closing process for many months.

Determine a fair price

• Be prepared by completing your own market analysis in advance of identifying properties to purchase. 
• Have your end strategy in mind before you make a bid, keeping in mind the rehab and holding costs (taxes, insurance, maintenance). 
• Try to find comparables that were purchased as REO, rather than comparing to conventional sales. 
• There may be appraisers who specialize in distressed asset valuation; seek one out in your area. 

Negotiate

• Nonprofit organizations should be prepared to aggressively negotiate the purchase price of an REO property.  Servicers have a fiduciary responsibility to return maximum value to their investors.  However, most own properties all over the country and don't have the knowledge of the local market that a nonprofit community development organization has. 
• Back up your offer price with repair estimates and photos or video of both the interior and exterior of the property (digital photos can be sent via email to speed up the process). 
• Be prepared to demonstrate that your offer represents maximum value given market conditions and average days on the market for your area.

Resources for Finding Out the Legal Status of Property

• Public records of property title and history are held in state, county or city offices (e.g., County Clerk's office).  A free resource for accessing state and county public records is BRB Publications.
• Records of default are also held publicly and contain notification if a property has gone into foreclosure.
• Online Sites listing foreclosed properties for sale. While some sites charge a fee for specific listings and updates, they also offer a great deal of free advice about buying foreclosed and/or vacant homes. Among these sites are RealtyTrac® and RealtyStore.
• For resources on contacting lenders and servicers who own property, click here [link to the existing Find Property button at stablecommunities]
• The National Community Stabilization Trust (NCST) has resources and information. Stable Communities also provides information on the NCST.