Looking for REO property or a foreclosure in Oklahoma City?
What is an REO?
"REO" or Real Estate Owned are properties which have been foreclosed upon that the bank or mortgage company presently owns. 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. You must also be able to pay with cash in hand. And on top of all that, you'll get the property entirely as is. That may comprise of existing liens and even current occupants that may require eviction.
A bank-owned property, conversely, is a much neater and attractive transaction. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The lender will handle the elimination of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
You should be aware that REOs may be exempt from standard disclosure requirements. For instance, in California, banks are not required to give a Transfer Disclosure Statement, a document that normally requires sellers to reveal any defects of which they are informed. 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 assumed that any foreclosure must be a bargain and a chance for easy money. This isn't always the case. You have to be cautious about buying a REO if your intent is to make money. While it's true that the bank is often eager to sell it quickly, they are also looking to get as much as they can for it.
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 foreclosures. However, there are also many REOs that are not good buys and not likely to turn a profit.
All set to make an offer?
Most banks have a department dedicated to REO that you'll work with in buying REO property from them. Usually 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 discover as much as you can about their knowledge about the condition of the property and what their process is for accepting offers. Since banks most commonly sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for unknown damage and terminate the offer if you find it. As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
After you've submitted your offer, you can expect the bank to counter offer. Then it will be your decision 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 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. Metro Properties is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.