Is it standard procedure for a bank to verify and clear all liens on a property before they list it REO on the MLS?

In addition to the book you've read, you may want to check out the Book on Managing Rental Properties, it may help you determine the right policies and procedures to turn that property around.

My understanding is that the property owner needs a written document about the transition happening.Is there any standard procedure (e.g.

I also remind them of the agreement and late penalty procedures that are listed in their lease.  

There are standard procedures and traps you won't be familiar with.Also, there would be absolutely no advantage to not using one, even if you didn't need one.

very easy with leverage and new construction in the right markets.. thats 30 to 40% COC with leverage.unlevered you can do that buying fix and flip if you have some really good pipelines and procedures in place

I've read a number of articles on the bidding process but I still have some questions as to procedures.

It will be beneficial to your investing career to have your license because you will learn the industry, the procedures and be able to pick up investing leads. 

How many days do you typically have to close the deal and what procedures do y'all use to back out ?

As part of the re-qualify, you follow the whole same procedure and receive the full amount of escrow.