Purchasing REO property or a foreclosure in Oklahoma City?
What's an REO?
"REO" or Real Estate Owned are houses which have gone through foreclosure that the bank or mortgage company currently holds. 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 accrued during the foreclosure process. The buyer must also be ready to pay with cash in hand. To top everything off, you'll receive the property totally as is. That possibly may consist of current liens and even current denizens that may require removal.
A bank-owned property, conversely, is a more tidy and attractive proposition. The REO property did not find a buyer during foreclosure auction. Now the lender owns it. The bank will handle 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 example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement, a document that ordinarily requires sellers to make known any defects of which they are knowledgeable. By hiring Metro Properties, you can rest assured knowing all parties are fulfilling Oklahoma state disclosure requirements.
Is REO property in Oklahoma City a bargain?
It's frequently presumed that any foreclosure must be a bargain and an opportunity for guaranteed profit. This frequently isn't true. You have to be prudent about buying a REO if your intent is to profit from the sale. While it's true that the bank is typically eager to sell it quickly, they are also looking to minimize any losses.
When contemplating what to pay for 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. It is possible to find REOs with money-making potential, and many people do very well flipping foreclosures. However, there are also many REOs that are not good buys and may not be money makers.
Ready 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 often use a listing agent.
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 what they know regarding the condition of the property and what their process is for getting offers. Since banks usually sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unseen damage and cancel the offer if you find it. If, as a buyer, you can provide documentation demonstrating 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 real estate offer.)
Once you've made your offer, you can expect the bank to respond with a counter offer. Then 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 settled in one day, but that's usually not the case. 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. Metro Properties is accustomed to these situations and will work to ensure there are no unnecessary delays.