"REO" is short for "real estate owned." It refers to homes and other properties owned by banks and other lenders who have taken title through foreclosure. It is not a happy affair, but it can be, in some cases, the source of great bargains for homebuyers.

But be careful! As Jim Wasserman writes in the Sacramento Bee, "'Buyer beware' is the watchword with a bank-owned home sale." Buyers of foreclosure properties just don't have the safety nets available in more normal transactions. The Lenders, because they have never experienced living in the homes, are not required to disclose property defects or to repair when there are problems. Buyers, therefore, should make use of reliable inspectors to make sure they're not signing up for problems.

Further, the rather faceless banks tend to be reticent about negotiating prices. They will deal with counter-offers, but they frown upon lowball offers and tend to reject them. They also want the buyers to have their financing well in hand, and do not want to accept offers with contingencies.

In short, despite the many ads we see about making a fortune by buying foreclosure properties, we will be wise to bring in our real estate advisors and inspectors to make sure the bargain doesn't quickly become a lemon. Let's talk. Just

call Beth at 450-5208 and visit her website at www.bethbillington.com.