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General Appraising & Consulting Services, Inc. is a full service real estate appraisal firm dedicated to providing our clients professional, quality driven solutions for their valuation needs in the far Western North Carolina region.

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Real Estate Owned (REO) Properties

Appraisals for Real Estate Owned (REO) require an unique set of appraisal parameters for these types of assignments.  “The Dictionary of Real Estate Appraisal published by the Appraisal Institute” defines Real Estate Owned as follows:

“Denotes real estate that has been acquired by a lending institution for investment or through foreclosure of mortgage loans; also called owned real estate (ORE).”

And goes on to further detail this type of property as:

Other Real Estate Owned (OREO) which is a  term used primarily by commercial banks to identify real estate on the books that was taken back through foreclosure of a mortgage loan. The term other real estate owned is used by banks to distinguish foreclosed real estate from bank real estate owned (REO), which is corporate real estate assets. Typically the real estate industry uses the term REO for foreclosed real estate.”

In most instances the real estate appraisal industry is referring to foreclosed real estate on the lenders books when speaking about REO properties to appraisers and the public.  A lender when requesting an appraisal on OREO property is seeking not only the typical opinions of market value but is also seeking additional valuation information that will allow them to make decisions regarding the asset in question.  Typically an OREO appraisal will seek the following four opinions of value on the property in question:

  • AS-IS” opinion of Market Value based on a reasonable and typical market exposure time.
  • AS-REPAIRED” opinion of Market Value based on a reasonable and typical market exposure time.
  • AS-IS” opinion of Market Value based on a reasonable (but limited in some markets) market exposure time of a predetermined client imposed number of days usually not to exceed 120 days.
  • AS-REPAIRED” opinion of Market Value based on a reasonable (but limited in some markets) market exposure time of a predetermined client imposed number of days usually not to exceed 120 days.

The additional information is sought by the lender to facilitate their decision making process involving the holding of OREO properties.  Most lenders are under certain regulatory mandates that dictate their ultimate handling of such properties.  The lender is typically seeking a detailed itemization of needed repairs, estimated costs of those repairs, a thorough analysis of the typical market exposure time, and in some situations the client imposed shortened market exposure time for liquidation marketing purposes.

As professional appraisers our firm has the ability and experience to develop this type of appraisal in a supportable manner that will provided the maximum amount of information sought by the client.