Making an offer on REO property or a foreclosure in Oklahoma City?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional. If you have any questions about real estate in Oklahoma City, Oklahoma, call me or send me an e-mail.
What is an REO?
"REO" is another word for Real Estate Owned. These are properties which have completed the foreclosure process that the bank or mortgage company presently possesses. This differs from real estate up for foreclosure auction.
If you buy a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process. The buyer must also be able to pay with cash in hand. And on top of all that, you'll get the property completely as is. That may comprise of standing liens and even current denizens that may require eviction.
A bank-owned property, on the other hand, is a more tidy and attractive option. The REO property did not find a buyer during foreclosure auction. Now the bank owns it. The lender will deal with the elimination of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from standard disclosure requirements. For instance, in California, banks are exempt from giving a Transfer Disclosure Statement, a document that usually requires sellers to tell you about any defects they are aware of. By hiring Metro Real Estate, you can rest assured knowing all parties are fulfilling Oklahoma state disclosure requirements.
Am I assured a bargain when buying an REO property in Oklahoma City?
It is occasionally presumed that any foreclosure must be a good buy and a chance for guaranteed profit. This simply isn't true. You have to be very careful about buying a repossession if your intent is make money. Even though the bank is typically eager to offload it promptly, they are also looking to minimize any losses.
When considering what to pay for a foreclosure, carefully analyze comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale. The bargains with money making potential exist, and many people do very well buying foreclosures. Still there are also many REOs that are not good buys and may lose money.
Time to make an offer?
Most lenders have staff dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will frequently use a listing agent.
Before making your offer, you'll want to contact either the listing agent or REO department at the bank and learn as much as you can about what they know regarding the condition of the property and what their process is for accepting offers. Since banks typically sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for hidden damage and withdraw the offer if you find it. As with making any offer on real estate, providing documentation of your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
Once you've submitted your offer, it's customary for the bank to counter offer. Then it will be your decision whether to accept their counter, or offer a counter to the counter offer. Realize, you'll be contending with a process that generally involves multiple people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks.
* MOL = More or Less
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When considering what to pay for a foreclosure, carefully analyze comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale. The bargains with money making potential exist, and many people do very well buying foreclosures. Still there are also many REOs that are not good buys and may lose money.