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.
What's an REO?
"REO" or Real Estate Owned are houses which have been foreclosed upon and are presently held by the bank or mortgage company. This is not the same as a property up for foreclosure auction.
When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accrued during the foreclosure process. The buyer must also be prepared to pay with cash in hand. And on top of all that, you'll get the property totally as is. That possibly may consist of standing liens and even current residents that may require removal.
A bank-owned property, conversely, is a much neater and attractive proposition. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The lender will handle the removal of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from normal disclosure requirements.
For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to make known any defects they are aware of.
By hiring Niki Higgins, you can rest assured knowing all parties are fulfilling Oklahoma state disclosure requirements.
Are REO properties a bargain in Oklahoma City?
It's commonly presumed that any foreclosure must be a bargain and a chance for easy money. This isn't necessarily true. You have to be prudent about buying a repossession if your intent is to make money. Even though the bank is often eager to sell it fast, they are also looking to minimize any losses.
Look carefully at the listing and sales prices of comparable properties in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
There are bargains with potential to make money, 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 banks have staff dedicated to REO that you'll work with while buying REO property from them. To get their properties advertised on the local MLS, the lender will typically contract with a listing agent.
Prior to making your offer, you'll want to contact either the listing agent or REO department at the bank and discover as much as you can about their knowledge about the condition of the property and what their process is for accepting offers. Since banks almost always sell REO properties "as is", it may be in your best interest to include an inspection contingency in your offer that gives you time to check for hidden damage and cancel the offer if you find it.
If, as a buyer, you can provide documentation proving your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any real estate offer.)
After you've presented your offer, it's customary for the bank to counter offer. Then it will be your choice whether to accept their counter, or make another counter offer.
Be aware, you'll be contending with a process that usually involves a group of people at the bank, and they don't work evenings or weekends. It's not unusual for the process of offers and counter offers to take days or even weeks.