Purchasing REO property or a foreclosure in Oklahoma City?
Investing in a bank-owned property is not something to be taken lightly. If you have any questions regarding real estate in Oklahoma City, Oklahoma, call me or send me an e-mail.
What's an REO?
"REO" or Real Estate Owned are houses which have gone through foreclosure and are presently possessed by the bank or mortgage company. This is unlike a property 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 accumulated during the foreclosure process. The buyer must also be prepared to pay with cash in hand. And on top of all that, you'll accept the property completely as is. That possibly may involve prevailing liens and even current occupants that need to be expelled.
A bank-owned property, conversely, is a much neater and attractive proposition. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The bank will see 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.
Take notice that REOs may be exempt from standard disclosure requirements. For example, in California, banks are exempt from giving a Transfer Disclosure Statement, a document that normally requires sellers to reveal any defects of which they are aware. By hiring Ronck Realty Inc, you can rest assured knowing all parties are fulfilling Oklahoma state disclosure requirements.
Am I assured a good deal when investing in an REO property in Oklahoma City?
It is occasionally presumed that any foreclosure must be a good buy and an opportunity for guaranteed profit. This isn't necessarily the case. You have to be very careful about buying a REO if your intent is make money. Even though the bank is often anxious to offload it quickly, they are also looking to minimize any losses.
Look closely at the listing and sales prices of similar properties 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. There are bargains with potential to make money, and many people do very well buying and selling foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
Time to make an offer?
Most banks 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 learn as much as you can about what they know concerning the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unknown damage and cancel the offer if you find it. As with making any offer on real estate, providing documentation of your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
Once you've presented 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 submit another counter offer. Understand, you'll be working with a process that most likely involves several people at the bank, and they don't work evenings or weekends. It's not uncommon for the process of offers and counter offers to take days or even weeks.
* MOL = More or Less
Ronck Realty Inc 1831 S Morgan Rd Oklahoma City, OK 73128
Look closely at the listing and sales prices of similar properties 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. There are bargains with potential to make money, and many people do very well buying and selling foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
