You can certainly purchase the home by yourself, but I would strongly suggest (especially in a short sale or REO) that you work with an agent. There is always the infamous "Addendum A" that must be followed to the letter by the buyer of the REO property, and you should be advised by a professional regarding both the advantages and the pitfalls of buying a home that is owned by a lender. Here's some of the things to watch for:
1. The seller (hereafter "bank") will not provide any disclosures to you as the buyer to review
2. The seller will not make any repairs to the home and provide no warranties to you. Your only recourse if you find problems with the home is to cancel the contract.
3. The seller will require that you purchase the home "as is."
4. The seller may not (and probably will not) pay for any closing costs
5. The seller will require that you use THEIR choice of a title company or else pay for all associated escrow and title fee charges
6. The title company used by the lender may NOT be local and you'll lose both time and money in couriering packages to and fro
7. The seller may take as much as 2 weeks to approve your sales contract and may also leave it open ended so that another buyer (with more money or better terms) can purchase the home even after you've been approved as the buyer
8. If there is an HOA involved, the Seller will NOT obtain any documents from the HOA for you. This is more critical than you know since many HOAs are financially devastated by excessive bank foreclosures
9. Some banks are better to work with than others
10. If you don't close on time, the bank will charge you a cost PER DAY for delaying
11. You will need to close and sign documents first, and it can take the bank up to 1 full week to execute their papers. In the meantime, the buyer is paying for interest on the loan.
12. If the home does not appraise for the purchase price, the buyer has NO recourse to changing the price.
These are just a few of the problems that can occur in the purchase of an REO home. Again, working with someone who has this knowledge is critical to making a sound financial decision.
Good luck!! Call me if you need any additional assistance.
Grace Morioka, SRES, Realtor
Area Pro Realty
Tel (408) 426-1616