Your first line of defense is.....knowledge.......knowing how to read and understand all contracts involved in your business, and standard operating procedures.

I don't know your jurisdiction, the procedures and general time lines for this sort of thing, but assuming the FC occurred a few months ago, this does seem odd. 

I was analyzing my searching criteria procedures, Do more experience investors do more 'actually looking at houses'?

I've checked some of the properties on the Bronx, Queens, and Brooklyn county courts and they seem to be much more reasonably attainable than those listed on the MLS.As for procedure, I know that I need to do my due diligence.

To me it's standard procedure, and an option without an agreed purchase agreement is somewhat useless.

I'm sure the procedure is they will call their local REO agent contact and list it, when they feel like it.

Any attempt to make a mechanical procedure that is one-size-fits-all would be an exercise in futility.

The procedure involves some paperwork and a certified letter to the last known address of the owner of the home in question.

We don't know your procedures there, it sounds like you have a Lien, that you would have to foreclose on/go to court, in order to receive actual title (deed)?  

Please do NOT rely on suggestions from this blog ... that is if you want to be sure you are following all federal and local laws and procedures and that your investments/money are secure.Hiring a lawyer may be much cheaper than the alternative.