Making an offer on REO property or a foreclosure in Yukon?
Just as with any property purchase, your smartest move is to hire a professional real estate agent.
What is an REO?
"REO" or Real Estate Owned are properties which have gone through foreclosure that the bank or mortgage company currently holds. This differs from 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 amassed during the foreclosure process. You must also be prepared to pay with cash in hand. Finally, you'll accept the property totally as is. That possibly will consist of standing liens and even current residents that may require eviction.
A bank-owned property, conversely, is a much cleaner and attractive proposition. The REO property didn't find a buyer during foreclosure auction. The lender now owns it. The lender will deal with 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 normal disclosure requirements.
For example, in California, banks are exempt from giving a Transfer Disclosure Statement,
a document that usually requires sellers to reveal any defects they are informed of.
By hiring Metro First Realty West, you can rest assured knowing all parties are fulfilling Oklahoma state disclosure requirements.
Are REO properties a bargain in Yukon?
It's frequently presumed that any foreclosure must be a steal and a possibility for guaranteed profit. This frequently isn't true. You have to be prudent about buying a REO if your intent is to make money. While it's true that the bank is often anxious to offload it soon, they are also looking to get as much as they can for it.
Look closely at the listing and sales prices of similar homes in the neighborhood when considering the purchase of 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 flipping foreclosures. However, 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 when buying REO property from them. Normally 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 what they know concerning the condition of the property and what their process is for taking offers. Since banks almost always sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen damage and withdraw the offer if you find it.
If, as a buyer, you can provide documentation proving your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This goes for any type of real estate offer.)
Once you've made your offer, it's customary for the bank to counter offer. At this point it will be your choice whether to accept their counter, or offer a counter to the counter offer.
Your transaction could be settled in a single 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.