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By Adrian Huntington | Agent in Marina, San Francisco,...

Making an Offer on that REO property

Making an Offer on that REO property

So you’ve decided that owning an REO Property is the best for you. Purchasing a foreclosed home can mean discounts, but doesn’t mean less headaches than buying a regular home. Yes, lenders may be eager to dispose of such properties, and this only means they will find the quickest and easiest way to do this. So, if you want to make your offer accepted quickly, here are a few tips you can follow:

1) Make an all-inclusive offer – when you decide on a figure, make sure it includes all costs, such as closing costs, appraisals, etc. This just makes things simpler for the seller, so they won’t have to figure this out.

2) Have your financing in place – try to pay with all cash if possible, or have a lender ready to provide you with the money to purchase. Do your research beforehand and give your bid accordingly, instead of relying on the seller.

3) Have a realistic offer – this can’t be said enough times, but do your research. look at the prevailing market price, and also how much the lender has already lost on the property. Don’t lowball too much and risk being ignored (they will take the the first “best offer”). About 20% below the fair market value should be a good starting price.

4) Dot all the i’s - read the requirements and the fine print. Many opportunities are missed because of missing or incomplete paperwork.

5) Don’t be discouraged – it’s nothing personal if you don’t get the property you really want. Just move on and find another home you’re interested in. Also, don’t be surprised if you see the same property back on the market a few months later. Nothing is ever final.

6) Close ASAP – closing shouldn’t take months and months – try to speed up the process as much as you can. Most of the time the trouble comes from problems over the title. Try to iron out these details from the beginning or try to make offers only on properties with no disputes.

The lender will always take the path of least resistance, and will take the best offer they can – after all, they’ve already lost money on the first transaction and will want to recoup their losses.

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