Making an offer on REO property or a foreclosure in OKC?
Just as with any home purchase, your smartest move is to hire a professional real estate agent.
What is an REO?
"REO" is short for Real Estate Owned. These are houses which have been foreclosed upon that the bank or mortgage company presently possesses. This is unlike 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 amassed during the foreclosure process. The buyer must also be able to pay with cash in hand. Finally, you'll get the property completely as is. That could comprise of standing liens and even current denizens that may require eviction.
A bank-owned property, on the other hand, is a much neater and attractive transaction. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The lender will deal with the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Do be aware that REOs may be exempt from normal disclosure requirements. For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that ordinarily requires sellers to make known any defects they are aware of. By hiring Stacy Lyons-GRI,Realtor,CHMS,e-PRO,SFR,AHWD, you can rest assured knowing all parties are fulfilling Oklahoma state disclosure requirements.
Is REO property in OKC a bargain?
It's commonly thought that any REO must be a bargain and a possibility for guaranteed profit. This often isn't true. You have to be prudent about buying a REO if your intent is profit from the sale. Even though the bank is often anxious to sell it soon, they are also motivated to minimize any losses.
When contemplating the value of a foreclosure, you need to look closely at 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. There are bargains with potential to make money, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Most lenders have staff dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will typically contract with a listing agent.
Before 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 accepting offers. Since banks most commonly 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 terminate the offer if you find it. If, as a buyer, you can provide documentation showing your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This goes for any type of real estate offer.)
Once you've submitted your offer, you can expect the bank to respond with a counter offer. Then it will be your decision whether to accept their counter, or make another counter offer. Realize, you'll be working with a process that usually involves several people at the bank, and they don't work evenings or weekends. It's typical for the process of offers and counter offers to take days or even weeks.
Stacy Lyons-GRI,Realtor,CHMS,e-PRO,SFR,AHWD 1831 S. Morgan OKC, OK 73128
When contemplating the value of a foreclosure, you need to look closely at 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. There are bargains with potential to make money, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and may not be money makers.
