Although the lender usually clears out any liens on the title, you should still make any purchase offer contingent on a title search. You can often make a successful offer that's still substantially under the market value. There is no set time frame within which the banks must sell their REOs; however, banks often want to get REOs off their books rapidly. As a result, many REOs sell quickly. The only exception is if there is a "redemption period" for the owner to buy back the property after it is repossessed by the bank. State law dictates if there is any redemption period. The bank will typically wait until the end of any redemption period to sell the property.
REO means Real Estate Owned (by the bank). Banks almost always sell "as is" only. Most of the time you will not be provided any inspections by the bank. You will not receive all the disclosures that you would if you were buying from a private party (the bank is exempt from most disclosures because they never lived at the property). Banks have strict time lines and rules. If you do not close escrow by the date on the contract they may cancel the sale or may charge you a per day penalty for each day that you are late. This is usually about $100 per day. Experienced representation can help you avoid this pitfall. Your investigative period most likely will be short (about 7 days). You have the right to have any inspection done that you want but you will have to pay for them. The bank will select the title and escrow companies. They will often pay for some of the buyer's title and escrow fees. The banks DO NOT make decisions based on emotions, purely on the numbers. You MUST be pre-approved for your mortgage and sometimes they require you to be pre-approved by their pre-determined mortgage broker. However you will be able to choose who you obtain the financing through.With proper representation, you will probably get a GREAT DEAL on the property because banks are often the most motivated sellers there are in the marketplace.