Making an offer on REO property or a foreclosure in Oklahoma City?
Just as with any property purchase, your smartest move is to have a professional Realtor advocate for you and represent your best interest. Ask your Crossland Realtor about Buyer Brokerage for you.
What's an REO?
"REO" or Real Estate Owned are houses which have been foreclosed upon and are now owned 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 amassed during the foreclosure process. The buyer must also be willing to pay with cash in hand. And on top of all that, you'll receive the property completely as is. That possibly could involve standing liens and even current denizens that may require removal.
A bank-owned property, on the contrary, is a more tidy and attractive option. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The bank 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.
You should be aware that REOs may be exempt from typical disclosure requirements. In California, for example, banks are exempt from giving a Transfer Disclosure Statement, a document that normally requires sellers to make known any defects of which they are aware. By hiring Crossland Real Estate, Inc., you can rest assured knowing all parties are fulfilling Oklahoma state disclosure requirements.
Am I guaranteed a good deal when buying a bank owned property in Oklahoma City?
It's occasionally presumed that any REO must be a good buy and an opportunity for guaranteed profit. This often isn't true. You have to be cautious about buying a REO if your intent is to make money off of it. While it's true that the bank is usually eager to sell it soon, they are also motivated to minimize any losses.
When considering 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 buying foreclosures. However there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with when buying REO property from them. Commonly the REO department will use a listing agent to get their REO properties listed on the local MLS.
Before 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 what they know about the condition of the property and what their process is for receiving 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 unknown 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 is generally true for any type of real estate offer.)
After you've made your offer, you can expect the bank to respond with a counter offer. At this point it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Your transaction could be final in a single day, but that's usually not the case. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.
Crossland Real Estate, Inc. 8901 S Santa Fe Ave. Suite C Oklahoma City, OK 73139-8413
When considering 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 buying foreclosures. However there are also many REOs that are not good buys and may lose money.
