There is no difference in purchasing a REO or regular sale. However, the REOs are snatched up pretty quickly...I've seen cash bids on homes up to $300K ..and that's what banks are looking for. You may have to put in several offers before one gets accepted as almost all REOs are bringing in multiple offers at the moment.
Please let me know if I can be of further assistance with your real estate needs.
--Foreclosures are generally priced lower than market value of properties offered as regular sales
--Although it may take a few days for the bank to respond (accept, counter or reject), it's still a lot sooner than a short sale lender would respond.
--Foreclosures will also sell close escrow sooner than a short sale
--Foreclosures (also known as REOS) have their own contract that diffesr from the standard California Association of Realtor forms -- so one will need to carefully review the terms
--If buyer doesn't close escrow on schedule, buyer is liable to pay $50-100/day for each day of delay
--Almost always AS IS sale -- no repairs, no credits
--Banks almost always insist on shorter contingency periods for buyer inspection, loan appraisal; and shorter escrow periods
--Even in areas where the local ordinance requires sewer lateral to be tested/repaired/replaced as condition of closing the sale, the foreclosing bank will want the buyer to take care of this
--Possible deferred maintenance or damaged specially if the property has been vacant for a while or if the previous owners had deliberately caused damage because of anger over being foreclosed
A con is that you will not get a history of that property that a normal physical seller can give you. Inspections are crucial in any transaction but even more so with an REO. Perform any and all inspections with qualified inspectors ( home,pest,roof,chimney, foundation, sewer lateral just to name a few) until you are satisfied with the results.