Home Buying in San Jose>Question Details

leo_vishnevs…, Home Buyer in San Jose, CA

How hard is it to buy an REO without an all cash offer?

Asked by leo_vishnevskiy, San Jose, CA Sat Jul 6, 2013

Will I even get considered with pre-approved financing in place?

Help the community by answering this question:


yes you will.


Ninva Chamaky
Broker Assoicate/Intero Real Estate Services
Certified Distressed Property Expert
0 votes Thank Flag Link Sat Jul 6, 2013
a complete offer pkg/ documentation make a big difference as well, your realtor should have the knowledge and background in REO.


Ninva Chamaky
Broker Associate/ Intero Real Estate
0 votes Thank Flag Link Sat Jul 6, 2013
Absolutely. For the most part REO properties only allow offers from buyers looking to buy their primary residence. This only happens the first weeks of the house being on the market. If the house needs repairs, 203(k) will be your only finance option. If it doesn't really need work, you'll be able to do not just FHA but also conventional loans.

I would consider meeting with a Loan Officer and seeing what your financing options are. I'm always available to help if you need a REO financing expert. Good luck!

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Javier Meneses
Senior Loan Officer
NMLS #23130
310 Crossways Park Drive
Woodbury, NY 11797
(516) 606-9648 Cell
(516) 740-4478 Office
(516) 918-5383 Fax
0 votes Thank Flag Link Sat Jul 6, 2013
As you've seen below, it depends, mostly on property condition. We've helped tons of buyers buy an REO with financing. In reality, right now, your biggest problem is finding one - there are not a lot of REOs out there. Here is a post that may help:

How To Buy An REO – Top 17 Questions Answered
0 votes Thank Flag Link Sat Jul 6, 2013
Not too hard. I have closed many REOs with financed offers. Short escrow, no termite clearance and no contingencies will help.
Good luck,
0 votes Thank Flag Link Sat Jul 6, 2013
If the home was heavily vandalized by the previous owner when they were forced out it will be more difficult to get a loan approved for that property. The other issue is that it may take so long to get your purchase accepted and escrow closed that your interest rate changes significantly from when you began. Be sure you have reserves.

Your offer would be considered though. I have helped several clients buy foreclosed properties and they took out mortgages.

San Jose real estate information at http://julianalee.com/san-jose.htm

Juliana Lee
Top 2 agent nationwide at Keller Williams Realty, the nations largest
Cell 650-857-1000

Over 20 years experience
Over 1,000 homes sold in Santa Clara County and San Mateo County
Web Reference: http://julianalee.com
0 votes Thank Flag Link Sat Jul 6, 2013
Hi Leo,

All thing being equal--price, terms, and closing--banks will still choose cash offers to those that require loans. However, if you are the high bidder with no contingencies, a high down payment and a quick close, there are banks--especially Wells Fargo, that will select a buyer with a loan versus a cash offer buyer. Keep in mind, however, that the buyers who did get the home paid much more than the next competing offer. The magical number seems to be $10-15k more than the next offer.

Best of all work with an experiences Realtor who can give you inside information about all of the banks. Each one is different and there are different strategis to be used for each.

Good luck!!
Grace Morioka
Allison James Estates and Homes
0 votes Thank Flag Link Sat Jul 6, 2013
the short answer is yes. We have gotten numerous REO properties into contract that weren't all cash, because banks look at the bottom line - how much money are they getting. You should find an agent who has experience dealing with this kind of property as process is different.

Best Regards,

Lance King/Owner-Managing Broker
King Realty Group

DRE# 01384425
0 votes Thank Flag Link Sat Jul 6, 2013
It actually becomes simple for you:
Your Realtor will do a CMA to determine the Market Value.
Normally, the Appraisal will not allow you to pay more than Market Value; it is really protecting you from hurting yourself.
There are some loans that will allow more than the Appraisal; talk to your lender.
If you are in the "affordable" price category, be prepared to try several times, at least; and this doesn't vary with just Cash Offers.
Talk to your Realtor.
0 votes Thank Flag Link Sat Jul 6, 2013
So its not a waste of time then? I heard that unless you have all cash for these bank-owned properties, your automatically considered a second-rate offer even if your financed offer is for more than an all cash offer from another buyer. Is this true or will banks accept the highest offer no matter where the money comes from?
Flag Sat Jul 6, 2013
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