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Buying REO property or a foreclosure in Edmond?
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Just as with any home purchase, your smartest move is to hire a professional real estate agent. |
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What's an REO?"REO" means Real Estate Owned. These are houses which have been through foreclosure and are now possessed by the bank or mortgage company. This is different than 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 ready to pay with cash in hand. To top everything off, you'll accept the property entirely as is. That could comprise of existing liens and even current tenants that may require removal.
A bank-owned property, by contrast, is a much cleaner and attractive option. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The bank will attend to the removal of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from typical disclosure requirements. For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to disclose any defects they are knowledgeable of. By hiring Prudential Alliance Realty Inc., you can rest assured knowing all parties are fulfilling Oklahoma state disclosure requirements.
Is REO property in Edmond a bargain?It's commonly thought that any foreclosure must be a steal and an opportunity for guaranteed profit. This isn't always the case. You have to be cautious about buying a repossession if your intent is to make money off of it. Even though the bank is often eager to sell it promptly, they are also motivated to get as much as they can for it.
 Look carefully at the listing and sales prices of comparable homes 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. The bargains with money making potential exist, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and may lose money.
All set to make an offer?Most mortgage companies have a department dedicated to REO that you'll work with while buying REO property from them. Usually 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 find out as much as you can about their knowledge about the condition of the property and what their process is for receiving offers. Since banks typically 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 retract the offer if you find it. As with making any offer on real estate, your offer may be more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
Once you've submitted your offer, it's customary for the bank to counter offer. Then it will be up to you to decide whether to accept their counter, or submit another counter offer. Understand, you'll be dealing with a process that probably involves a group of people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks. Prudential Alliance Realty Inc. is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.
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