Purchasing REO property or a foreclosure in Norman?
Making an offer on a bank-owned property is not something to be taken lightly.
For more information, just contact us
through our site or e-mail us
. We're glad to address any questions you have regarding real estate foreclosures.
What is an REO?
"REO" stands for Real Estate Owned. These are houses which have gone through foreclosure and are currently held 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 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 entirely as is. That may include current liens and even current denizens that need to be evicted.
A bank-owned property, on the other hand, is a much neater and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The lender will handle 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 instance, in California, banks do not have to give a Transfer Disclosure Statement,
a document that ordinarily requires sellers to make known any defects of which they are knowledgeable.
By hiring Centennial Real Estate, you can rest assured knowing all parties are fulfilling Oklahoma state disclosure requirements.
Is REO property in Norman a bargain?
It is occasionally believed that any foreclosure must be a good deal and an opportunity for easy money. This isn't necessarily true. You have to be very careful about buying a repossession if your intent is to profit from the sale. While it's true that the bank is usually anxious to offload it promptly, they are also motivated to minimize any losses.
Look closely at the listing and sales prices of comparable properties in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades 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. But, there are also many REOs that are not good buys and may lose money.
Time to make an offer?
Most lenders have staff dedicated to REO that you'll work with while buying REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.
Prior to 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 regarding the condition of the property and what their process is for receiving 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 unknown damage and cancel 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 made your offer, you can expect the bank to respond with a counter offer. Then it will be your choice whether to accept their counter, or make another counter offer.
Realize, you'll be dealing with a process that most likely 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. Centennial Real Estate is accustomed to these situations and will work to ensure there are no unnecessary delays.