Cynthia, Home Buyer in San Francisco, CA

Do i need to give blank checks to my realtor to bid in a REO? is this normal?

Asked by Cynthia, San Francisco, CA Mon Aug 25, 2008

I wan to bid in a REO and my realtor told me I have to give him a blank check to do the bid? is this normal I have never bid in a REO and i don't know if this is common.

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6
Cynthia,

Your caution is well warranted. Forget about the REO issue.........It doesn't make good sense to give anyone a blank check for any purpose.

I'd be curious to know, who the check should be made out to?
0 votes Thank Flag Link Tue Aug 26, 2008
Hi Cynthia,

No, in my opinion this is not normal, nor advised. Most bank owned properties are listed on the MLS as other properties are and while the process varies some from a "typical" transaction, you will still fill out a purchase agreement, decide on the earnest amount to accompany the offer, and then submit the offer to the listing agent. Since each property is different amount, and you what you decide to offer can change depending on condition and location, the offer price and the earnest amount changes. The earnest deposit check is made out to a Title Company, who will be the neutral 3rd party in the transaction. The money is held by them and they will ensure that the money goes to the seller and deed to the buyer.

I would have a serious conversation with your Realtor to determine why they are asking for a blank check. I personally do not and would not ask a client for that, since there it would give you the buyer no advantage.

Hope this helps and if you have any other questions, please do not hesitate to contact me.
0 votes Thank Flag Link Tue Aug 26, 2008
Good answers all. NO BLANK CHECKS. My suggestion is you choose and escrow company you would like to use and make it out to tthem. Select them in your offer and make that part of your offer. The Lender usually has a someone they get a good deal from the handle the transaction. Doesn't mean you can't use your own if you want to and I highly recommend that. It might cost you a little more but it gives you the control. In the event the Lender insists and you are ok with that just re-write the check when you sign the inevitable counter-offer.
0 votes Thank Flag Link Tue Aug 26, 2008
Cynthia;
If you're asking about providing a blank check to the payee I would not leave it blank. The check you're talking about would be your good faith deposit. This is usually made out to the title company from the buyer when providing a purchase agreement. When submitting an offer for REO bank owned property the bank is in control of the title company selection and it usually is them handling their own escrow. My buyers are making the good faith deposit out to "The Title Company" not leaving it blank. And remember this deposit is to be deposited into the brokers trust account and held there until you are in contract. After that the escrow company will pick up the check from the broker for deposit into the escrow. You should not be giving you agent blank checks to bid on REO properties.

John Petrocelli
EcoBroker,CRS
Windermere Properties of the East Bay
0 votes Thank Flag Link Mon Aug 25, 2008
Common sense would say that you should never give a blank check to anyone.
Web Reference: http://GetPrequalified.com
0 votes Thank Flag Link Mon Aug 25, 2008
Cynthia,
Most REO listing agents ask for the following to be included with all offers. A pre-approval letter from a lender. A check written out to title company in the amount of the good faith deposit / initial deposit. Since most REO'S don't have an assigned escrow office, it needs to be made out to Title company. It is best to send a copy of the bank account, checking account, certificate of deposit, showing where the funds are coming from.
The check should be written to Title Company. The check should have an amount and be written to title company.

Thanks,

Adrian Huntington
Welcome Home Real Estate & Finance
53 La Serena Ct.
Alamo, CA 94507
adrianh@americanfinancialfunding.com
925-818-6694
0 votes Thank Flag Link Mon Aug 25, 2008
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