Furthermore, your BUYERS AGENT can help you evaluate the real value of the property so you are prepared to act decisively--without over-paying--if you get into a multiple offer situation. Remember that an offer is not only about PRICE, but also about TERMS. If you have all cash or a very large down-payment, you can offer a quick time period for closing escrow....if you don't have that big-cash advantage, you should be prepared to bid towards the higher end of the property's possible price range, in order to convince the seller to give your FHA-offer a chance.
Also, you have to pick the right KIND of REO property for your situation. Since an REO seller will generally NOT agree to do any repairs, an FHA buyer has to pick a home that is already in good, habitable shape in order to satisfy their FHA appraiser and lender. An all-cash buyer can take a chance on buying a house with a leaky roof, a rotted porch or a non-permitted garage-converted-to-bedroom....these can all be great bargains at the right low-ball price! Your BUYERS AGENT can help you identify the right kind of target for your REO offer.
I keep emphasizing the importance of working with a good BUYERS AGENT because you can't necessarily trust the seller's agent to represent your interest whole-heartedly if push comes to shove. The listing agent works first-and-foremost for their bank/seller client, who is going to give them a lot more business in the future. A BUYERS AGENT can be crucial in keeping things in perspective for you, sticking up for your side in a dispute, and pointing out ALL your options. You should really have the feeling your agent is in favor of YOU, not just in favor of the DEAL.
So be sure to look for an agent who specializes in representing BUYERS and has experience dealing with REO transactions---since we don't hang our signs in front of anyone's house, you usually have to find us through a web search or through word-of-mouth recommendations.
If you'd like to talk in more detail--about the ins-and-outs of an REO purchase, or about the market trends in Carmel, Pebble Beach, Monterey, Pacific Grove or Salinas--feel free to contact us through our websites:
http://www.CarmelOnSale.com , http://www.PebbleBeachOnSale.com, http://www.MontereyOnSale.com, http://www.PacificGroveOnSale.com.....you get the idea! Hope to hear from you soon.
Depending on the bank some repairs may be made before the house goes on the market...cosmetic repairs or termite issues, but not always.
There are definately deals out there...you need to be ready to act the day the property comes on the market. Make your offer and be ready to make all your inspections and all the contingency removals done in a shortened amount of time. If you pay cash or have a conventional loan with a minimum of 20% down you usually have an advantage oer the FHA loans with litlle down.
Best of luck...
Reading between the lines, I'm wondering whether you are running into resistance or uncooperative behavior from the listing agent for the property, since usually you don't have any direct contact with the seller themselves. I've experienced that myself at times when representing buyers on REOs. So advice I'd offer is to work with an experienced agent working for you, who is not the listing agent. It costs you nothing, and gives you independence from the listing agent, who is primarily working for the seller.
Your agent should be prepared to provide you a road map of the due diligence process, as well as how to structure an offer to be attractive to the seller. You should understand that the seller will require you to agree to an addendum to the contract that is written by them and favors their position, and you have basically no negotiating strength to modify those terms.
If you are an experienced buyer, and/or have an experienced agent you trust to put your needs first, there are some great opportunities available. You have to be able to distinguish the deals from the dogs, however. If I can provide you more information, please contact me through my website, noted below. Good luck to you!