Purchasing REO property or a foreclosure in Edmond?
Just as with any home purchase, your wisest move is to hire a professional real estate agent.
What's an REO?
"REO" is an abbreviation for Real Estate Owned. These are houses which have been foreclosed upon and are now held by the bank or mortgage company. This is not the same as 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 added during the foreclosure process. You must also be ready to pay with cash in hand. To top everything off, you'll get the property totally as is. That might comprise of current liens and even current denizens that need to be evicted.
A bank-owned property, by contrast, is a much cleaner and attractive deal. The REO property didn't find a buyer during foreclosure auction. Now the bank owns it. The bank will see to the elimination of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from normal disclosure requirements.
For instance, in California, banks are exempt from giving a Transfer Disclosure Statement,
a document that typically requires sellers to disclose any defects of which they are informed.
By hiring Coldwell Banker Mike Jones Co., you can rest assured knowing all parties are fulfilling Oklahoma state disclosure requirements.
Am I guaranteed a bargain when buying a bank owned property in Edmond?
It is sometimes presumed that any foreclosure must be a steal and an opportunity for guaranteed profit. This isn't always the case. You have to be very careful about buying a repossession if your intent is to profit from the sale. While it's true that the bank is often eager to sell it quickly, they are also looking to minimize any losses.
Look carefully at the listing and sales prices of comparable homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in.
It is possible to find REOs with money-making potential, and many people do very well buying and selling foreclosures. But, there are also many REOs that are not good buys and may not be money makers.
Time to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with when buying REO property from them. Usually the REO department will use a listing agent to get their REO properties listed on the local MLS.
Prior to making your offer, you'll want to contact either the listing agent or REO department at the bank and find out as much as you can about their knowledge about the condition of the property and what their process is for taking offers. Since banks usually sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for hidden damage and retract the offer if you find it.
As with making any offer on real estate, providing documentation proving your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've made your offer, it's customary for the bank to make a counter offer. At this point it will be your choice whether to accept their counter, or make another counter offer.
Your transaction could be final in one day, but that's rare. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.