Equity in REO

[Rochelle C.]

How is equity determined in a foreclosed, bank owned property and is there an easy method of assessing what it is or does the property require an appraisal first in order to know how much equity remains?

Thanks,
Rochelle

[Matt Kearney]

You need to pull comparable sales to determine the After Repaired Value of the REO. Use houses that are in good condition and are not distressed sales.

Compare the after repaired value to what the bank is currently asking to see if there is equity in the deal and if it is worth pursuing.