Do you ask dentist for helpful hints on how to pull your own teeth?
Do you ask doctors where to cut so that you can remove your own appendix?
Do you ask attorneys for helpful phrases to insert into the trust that you a drawing up yourself?
All of the answers to your question were some mutation of: â€œGet an experienced Realtor to help you outâ€. I agree. In almost all cases, it costs you nothing because the seller pays you Realtor.
Is the property even available?
What are comparables?
Are there any competing offers?
Banks don't like to pay closing costs or repairs for REO properties. So if you want to write a strong offer that actually has a chance of being accepted then the only contingency you should ask for is your inspection period. If you don't like the results of any inspections you complete then you don't have to go forward, as long as you are within the time frame of your due diligence period.
You may want to contact a Realtor and request that the Realtor represent you. Every transaction, whether bank owned or standard offerings, is different. The Realtor can help you determine a reasonable offer and more importantly determine how you can stand out in case there are multiple offers. Multiple offers are very common at this time.
Your Realtor can help you secure a pre approval letter from the lending institution noted in the offering. Bank owned properties often specify which lender they prefer to do the "cross qualification" letter. You have the right to use any lender you prefer, but banks are more often than not demanding a cross qualification. Several lenders were not doing their home work and giving pre approval letters without doing a credit, employment and other checks to make sure that the buyer was qualified to complete the purchase. This meant that a property was tied up for weeks or months before learning that the buyer did not qualify. Banks and sellers lost valuable time and may have not accepted a different offer that did not look as good on the surface.
Your written offer on the California Association of Realtors or other state forms will allow for your questions regarding costs and who covers the expense. It will also allow you to ask for basic and/or other repairs such as termite, pool and roof certifications, etc.
Call a Realtor and create a relationship. Realtors work on commission and will work to close the deal for you. They do not receive compensation for anything they might assist you with if they do not secure and close the transaction for you. If the Realtor knows that you will work with them they will work harder for you.
So in order for them to represent you as well both the Bank and You have to agree to that in an Agency Disclosure Form, anything you reveal to that agent, such as I want to pay X but willing to go to Y may end up being told to the Seller they'll go to Y, or their lender states they are approved for a higher amount.
When you have an agent representing you they will council you on what you need to do to get your offer accepted. Often times your agent will draft a cover letter to show how strong of a buyer you. In a multiple offer situation this can help the listing agent know which offer they may want to accept.
As for closing cost, your agent will tell you what is customary in your area. However, Banks often times will dictate what they will or will not pay in closing. Expect to assume any repairs at your own cost. Disclosures will be minimal.
I just finished typing this and realized the date was JAN not JUNE 28th. Well anyway, did you get your home?
There are many qualified agents who would be happy to work with you and write an offer. As someone else noted, with bank owned properties there are very often multiple offer situations. An agent can assist you through all aspects of the transaction.
negatives for you to do this - just positive!! Time can be of the
essence in the REO process and you will benefit by leveraging
the expertise of an experienced Realtor.
Your question has generated many responses and many points which you should consider. I would ask myself two questions:
1. What is the downside to seeking out representation?
2. The seller (in this case the bank) has representation looking out for their best interest, why wouldn't you want that same benefit?
Knowledge is power and the more you have the more you will benefit.
April Tavares, GRI, ASP
Realtor, DRE #01742179
Prudential California Realty/Riverside
John & Sarena Villaescusa
Keller Williams Realty
However, if your question is about writing a "letter" to the bank expressing your interest to buy "1" REO property, then I would say don't waste your time. Find an experience agent and work with him/her to help you to submit offer(S). You will need to submit multiple offers on multiple homes before 1 would be accepted.
First, banks are not real estate brokers, they don't want to be, so they outsource the selling of their assets to local real estate brokers.
Second, banks are restricted by federal and state banking laws, so all their transactions are completed on legal documents...not just a simple letter. So you will need help to review and understand these legal documents to protect your "buyer" position, including your cash deposit.
Third, asset managers just want to know what's your offer? Each asset manager is managing "thousands", if not hundreds of thousands of homes...so they don't want to know your whole story....to them the house is just a piece of paper...but to you...it's a house that could be filled with memories.
Fourth, when the banks' asset is an REO, the bank is already at a loss position. So it is merely trying to recover as much of the loss as possible. So asking the bank for closing costs, repairs, etc. will lower your chances of their acceptance of your offer. Again, I'm not discouraging your efforts because every transaction is unique, however, this is one of 2 main reasons (the other is all cash purchase) why investors consistently out bid individual home buyers.
I hope the information helps.
REO companies and their asset managers do not negotiate with individuals, only through their selected REO agent. Contact the listing agent or, preferably, get yourself a buyer agent representative to make your offer. In general, you will pay your own closing costs or negotiate part of it into your offer in the form of a seller's concession.
Sometimes it is best to use a buyers agent versus the listing agent. All depends on your comfort level and knowledge of what you are offering etc.