"REO Occupied"?

[Susie]

While playing around on Zillow, I checked out a house that is on our street, sort of around the bend from us.  It's been unoccupied, or at least I thought it was, for as long as I can remember (we have lived here 9 years).  Zillow now lists it as a foreclosure:

"REO Occupied - the seller does not represent or guarantee occupancy status. NO VIEWINGS of this property. Please DO NOT DISTURB the occupant. "As is" cash only sale with no contingencies or inspections. Buyer will be responsible for obtaining possession of the property upon closing. The property at XX YYYYYYYYY Ave, ZZZZZ, ZZ is a Residential Single Family property with 3 bedroom(s) and 2.0 bathroom(s), built in 1981 and is 1858.00 square feet. Live bidding is ACTIVE for this property, sold in "as is" condition with no contingencies or warranties. Cash only. Make your bid now!"

I've seen people around and sort of creeping around the perimeter.  What is REO occupied?  

I really hope someone buys and rehabs whatever it needs, but that sure sounds kind of ominous!

[auroraloo]

REO means owned by a lender/bank, right? So a bank owns it but someone is still living there? sounds like they're saying it's not vacant even though it's bank owned.

[dancelnow]

Squatter situation it sounds like. The bank hasn’t wanted to deal with the sheriff and actually removing the person and you can almost guarantee it’s not going to be pretty.

[Deleted]

We looked at a property with this description a few years ago. It was bank owned and someone was living in the home.

It's kind of a gamble. The person could be riding out the foreclosure or squatting with intentions of moving whenever the home is sold. Or they could be completely insane and you'd have to go through a formal eviction process. Either way, the bank has determined its not worth their time to evict them, which isn't terribly uncommon with large banks.

[mrs.jacinthe]

It's foreclosed and someone is still living there - either the previous tenants, previous owners, or random squatters. Basically, the bank is making their removal someone else's problem. It's a run, don't walk scenario unless you *really* want the property.

[Susie]

Ha, guess I won't get my hopes up for someone to buy it anytime soon!

I am really curious about the person who's occupying it. I never, ever, ever see anyone come or go. I live on a horseshoe shaped street, and come/go past that house maybe half the time (the other half I go the other direction). So strange.

[dr.girlfriend]

I've seen listings with similar warnings in my area occasionally. What confuses me is DO NOT DISTURB OCCUPANT. I mean, if this person is squatting, damaging the bank's chances of a sale, why would they care if they are disturbed? I would think they would want them bothered all the times in hopes of chasing them out, unless they are trying to limit their liability in case someone gets shot knocking on the door or whatever.

[mrs.jacinthe]

Jan 4, 2018 10:30:02 GMT -5 dr.girlfriend said:

I've seen listings with similar warnings in my area occasionally. What confuses me is DO NOT DISTURB OCCUPANT. I mean, if this person is squatting, damaging the bank's chances of a sale, why would they care if they are disturbed? I would think they would want them bothered all the times in hopes of chasing them out, unless they are trying to limit their liability in case someone gets shot knocking on the door or whatever.

This is plausible.  It's also possible that the person living there is a tenant from before it was foreclosed.  Sometimes banks will continue to allow a tenant to live in the property until it is sold (because money), and it's not at all uncommon for someone selling a rental to request a DND for the tenant.