REO properties are handled by financial firm REO asset management department. It usually sold at a big discount (could be 30%) compare to market value.

Many investors are aiming for REO real estates to earn big money. Why? It is because banks are forced to possess these REO properties due to unsuccessful bid during a foreclosure auction, and banks usually anxiously trying to get free of these properties as soon as possible and thus they are willing to sell it at a cost that far below market value. Often the price is much below than what is owed on the mortgage.

While most banks will have a REO asset management department, usually they will engage qualified estate agent who specialized in this REO field.

Besides the possible low price of the REO real estate, there are other advantages of buying a REO property than a foreclosed property.

The first great advantage is that you could check out the property before submitting an offer to the banks. By doing so, you will know how big is the property and calculate how much money you must pay if the property needs to be renovated after successful transacted to you. This is usually impossible if you are purchasing a foreclosure property in a foreclosure auction.

Secondly, there is no need to wait for the bidding to open to start your offer as there is no auction date such as in the case of purchasing a foreclosure property. You can do this anytime when you believe you are ready.
In addition, as there are numerous foreclosure properties stacking up, the bank usually will not ready to approve all this contract within a short period of time. And so you have pretty much time and a very good chance to reap many good REO properties from the bank's REO inventory.

Anyway, you have to take note that the bank REO asset management department usually will take a few months to wrap a REO transaction. And in most cases you must folk out your own money to recondition the REO property after buying as the bank may not sell it in perfect condition.

Basically if you have completed your homework properly and have selected the real estate with care, procuring and selling a REO property is a great investment that could make you a lot of money.