Some areas of the country are still experiencing a heightened volume of foreclosures which means local lenders continue to have a higher than normal volume of REO (Real Estate Owned) properties in their portfolio. Now, you may have heard you can get a good deal on foreclosure homes because banks want to get them off their books. It’s true, banks make their money making loans, not as landlords, but purchasing a foreclosure is much different than purchasing other Edmond and Greater Oklahoma City homeowner owned property in your market. Here are a few suggestions when looking into purchasing a foreclosed home.
First, have your Realtor research Realtors in your area specializing in foreclosures. How will they do that? If they don’t already know the specialist they will comb through the local MLS (Multiple Listing Service) and the internet for foreclosure listings in your area to find out which Realtor(s) are listing them for sale. Banks limit the number of Realtors they work with to sell off their REO assets in any one area to a relatively small number. These Realtors not only represent current listings, they will also know about other properties soon to hit the market. Having your Realtor open a dialogue with the local specialist can help you learn about properties before they hit the market.
Additionally, as with any home purchase you are better served to walk into the foreclosure purchasing conversation having already been pre-approved for a new mortgage. Realtors specializing in bank owned properties and the REO departments of those banks have many homes to manage. Show them you are a serious by coming in as a pre-approved buyer.
Finally, keep in mind you will be purchasing any foreclosed home “as-is.” Banks don’t want to put good money in after bad. They want quick, issue free closings. As we stated above, REO departments are managing many properties, and do not have the time to manage repair projects. Their stance is they have already lost money on the property, and justify the reluctance to cover repairs with a lower resale price. Food for thought.