Is REO an abbreviation for real estate owned?

amery · Apprentice Joined: 16 Apr 2006 Posts: 3

The matter with property sale is relatively clear. There is not such tax if you are selling a house you have been living in. However, you second home counts as a capital gain, and is liable to such a tax. Also, your old home could be excluded, and you should take it, if this is the case. However, if a home is foreclosed banks tend to offer them on auctions. In case they fail in selling, they will own them back, and they will be called REO - Real Estate Owned. It is often used to help lenders and their balances, but is also good for solid deals.

alejandro · Apprentice Joined: 14 Jan 2008 Posts: 7

When it comes to CGT, or capital gains tax, it is usually applied to the income you get when selling your home. Moreover, it only applies for second property, not the one you live in. However, even when you sell your own home, you have to report it so that there would be no suspicion on the behalf of IRS. The best thing to do is simply to state what you are selling and get the CGT forms. Now, lenders are OK with having REO properties and in that sense you should be in a position to make a good deal with it.

brice1439 · Apprentice Joined: 24 Dec 2006 Posts: 2

It seems to me that you should be sure how much your CGT is before you sell a house, so that you could calculate properly whether a deal is favorable to you. Now, capital gains tax is one of the most commonly misunderstood. That is why you have to be absolutely clear about everything that happens regarding that process. There are many situations in which you may find that REO properties are available. I agree with what is written above, and I suggest you learn more at http://www.realestateabc.com/homeguide/reo.htm.