Looking for REO property or a foreclosure in Stillwater?
Smart consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
What is an REO?
"REO" or Real Estate Owned are homes which have been through foreclosure and are currently held by the bank or mortgage company. This is different than real estate 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 willing to pay with cash in hand. To top everything off, you'll receive the property totally as is. That possibly will involve current liens and even current occupants that may require expulsion.
A bank-owned property, by contrast, is a more tidy and attractive deal. The REO property did not find a buyer during foreclosure auction. The bank now 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.
Note that REOs may be exempt from normal disclosure requirements. For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to reveal any defects they are aware of. By hiring One Broker Place, you can rest assured knowing all parties are fulfilling Oklahoma state disclosure requirements.
Is REO property in Stillwater a bargain?
It's commonly thought that any REO must be a bargain and a possibility for guaranteed profit. This isn't necessarily the case. You have to be cautious about buying a repossession if your intent is to make money. Even though the bank is often anxious to offload it soon, they are also looking to minimize any losses.
Look carefully at the listing and sales prices of competing properties 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. The bargains with money making potential exist, and many people do very well flipping foreclosures. But, there are also many REOs that are not good buys and may lose money.
Time to make an offer?
Most mortgage companies 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 usually contract with a listing agent.
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 about the condition of the property and what their process is for getting 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 unseen damage and terminate the offer if you find it. If, as a buyer, you can provide documentation showing your ability to secure financing, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any type of real estate offer.)
After you've submitted your offer, it's customary for the bank to counter offer. Then it will be your choice whether to accept their counter, or offer a counter to the counter offer. Be aware, 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 not unusual for the process of offers and counter offers to take days or even weeks.