Home Buying in Brea>Question Details

Mike Capobia…, Real Estate Pro in Orange, CA

What is the best way to get an offer accepted withoug going thru the REO agents lender?

Asked by Mike Capobianco, Orange, CA Tue Sep 20, 2011

0 votes Share Flag Home Buying in Brea

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Having been one of the loan officers at a major bank assigned to several REO agents, the bank wants you to try and recapture some of that business, there's no doubt about that (and you'd be foolish not to try if you're doing all this work). What are the reasons? Your guess is as good as mine. Maybe they're trying to lessen the loss they took when the borrower walked away/was foreclosed on, maybe they're trying to increase the pull-through by having one of their own make sure the deal is able to close, maybe they're just trying to boost their mortgage arm bottom line, who really knows (and of course, all may be true but you'll never see a public service announcement with their intentions).

I can tell you from personal experience that the borrower who brings me a full file to review and complete the required task of me quickly for, is much more likely to not be hassled by me since I have my own pipeline that needs attention so I'd rather commit minimal time unless I get the incling the person may want to work with me or need my services (I was/am a Renovation Specialist so just by having a quick chat, sometimes they know they need to change LO's). Some clients would prefer to work with a loan officer who works for the company the asset manager works with/for (95% of the time this sales tool is BS, I only got to talk to one of our asset managers three times in three years and that's only because I had clout with a high level corporate liason) but the majority of people prefer to work with the loan officer they spoke to first.

Ok, I'm rambling a bit here, long story short, the easier your make this process the less hassle you'll get. If you're truly not interested in working with the LO, just let them know up front and the majority of the time your hassles will be minimal. They _must_ do what's asked of them for them to stay assigned to REO agents so as long as you don't present a barrier to them completing the required task, you'll get what you need to proceed.

Sometimes it's better to play the game than to make a stand and fight.

Good luck all with your cross-selling. :)
Web Reference: http://RobWeber.com
1 vote Thank Flag Link Fri May 4, 2012
I've had my fiar share of REO listings and the seller (bank) always requests a pre-approval with their lender. That being said, most of the buyers usually use their own lender. When I submit the offers, I merely need to state whether the buyer has a pre-approval from the lender or not. So (at least in my case), I do not feel that obtaining that additional approval impacts the offer too much--it only cements for the seller the fact that the buyer is well-qualified.
1 vote Thank Flag Link Wed Sep 21, 2011

Quick, strong, clean are the catch words. Quick closing and shortened inspection periods. Strong offer with minium 3% good faith deposit, pre-approval letter (not pre-qual) and proof of funds. (And get you buyer to cross qualify with the REO agent's lender. Once your offer is accepted you don't have to use them, but what harm is there in using them if they at least match the offer from your lender?) Clean offer, don't ask for anything you don't need. Have the buyer do the termite inspection and if there are significant problems then request repairs, don't ask for termite work up front. Don't ask for credits. I even tell my buyer to pay for their own home warranty (and I usually gift this to them at closing, out of my commission).

That is how is it done. Quick, strong, clean. Good luck and Dare to Dream.

Shel-lee Davis, QSC®
Certified Distressed Property Expert – CDPE®
Short Sale & Foreclosure Resource – SFR®
Certified HAFA Specialist – CHS®
SSG Pro®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
424-2HELP12 (424-243-5712)
1 vote Thank Flag Link Wed Sep 21, 2011
Shel-lee really hit it on the head. I constantly tell my buyers the exact same thing. I only usually will go one step further though and provide a DU on an REO property. At that point it is hard to refute that strong of a loan.
0 votes Thank Flag Link Sat May 5, 2012
I personally wouldn't release the DU findings unless I had a written request from the seller and my client approved since it has confidential data on it.
Flag Sun May 6, 2012
Usually the REO seller just wants you to cross-qual with their lender, not necessarily use them.
0 votes Thank Flag Link Fri May 4, 2012
Some REO owners require a pre-qualification be done through their preferred lender in addition to the buyers choice of lender to reassure them that the deal will succeed to closing. If this is a cash deal only a proof of funds letter would be required. The best way to get an offer accepted is to follow the instructions provided via the listing agent who has been directed by the seller's as to what their requirements are. Going against the grain is one sure way to possibly not have an offer accepted.

All the best,
Gary Geer
0 votes Thank Flag Link Thu Sep 29, 2011
Cash in the bank account is the only way to not have to be pre qualified through many REOs lenders.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
California Department of Real Estate Broker License # 01312992
0 votes Thank Flag Link Sat Sep 24, 2011
Great question, submit your highest and best offer (in accordance with the comps) and the least amount of contingencies may help you. Cash buyers, short escrow, may help.
0 votes Thank Flag Link Thu Sep 22, 2011
We can give a a fully underwritten approval with property to be determined within 4 days of application. The only thing left is the purchase agreement and an appraisal. Much stronger than a preapproval letter.

Happy funding, Rudi
Web Reference: http://www.umboc.com
0 votes Thank Flag Link Thu Sep 22, 2011
If enough people complain the the DRE and other regulatory bodies I think there could be some changes. I think there should be a rule that if the buyer is already working with a lender, the lender that does the cross-qual on an REO (or any listing) should ONLY be allowed to do the cross-qual, not allowed to do the loan. That would take away a lot of the shady activity going on where lenders try to steal clients already working with other lenders by using their advantage of being the gatekeeper. I think there are some really terrible business ethics going on in this arena.
0 votes Thank Flag Link Thu Sep 22, 2011
The best way, if you already have a pre-approval, is to have your agent contact the REO Agent's loan officer to explain the situationand find out if some sort of verification from your lender (phone call. Email, fax) will suffice. I have done this on numerous occasions and met with success. If the REO lender knows that you already have a lender in place and that they aren’t getting the business, they might not want to waste a lot of time with the approval on a loan that they aren’t going to get.
That said, Agents ask this of the buyers for two reasons
A) To make sure that they have a strong buyer.
B) So that the Lender can compete for your business.
Since it’s not a bad idea to shop for your loan, having two lenders fighting for your business can be a huge benefit to you.
0 votes Thank Flag Link Thu Sep 22, 2011
Hey Mike,

Unfortunately, I think your clients are stuck with having to do this. Normally the buyer already has a nice loan package put together, so submission for quick approval is easy. I've been seeing a lot in my area where Prospect Mortgage has been the go to REO prescribed lender and my buyers ended up doing business with them. Their terms were better then the competitors and they were very communicative and punctual. You know our hands are tied with foreclosure properties....either play the game or no deal. Take care!
0 votes Thank Flag Link Wed Sep 21, 2011
HI Mike,

This is the nature of REO's. You will have to go through the agent's lender, You might want to let them know if you already have a direct lenders approval. This can help. There are some agents that will want it no matter what.. Usually having a Direct Lender approval is huge as you know it's approved through the atomated system. You may want to give them your lenders info for contact, and be sure your lender has all the clients documentation. This may help and is no guarantee... Good Luck....

Ingrid Ski Realtor
First Team Real Estate
0 votes Thank Flag Link Wed Sep 21, 2011
These Deals where you MUST Pre-Approve with their Lender are ridiculous!

The Bank is trying to force the Buyer to keep the Loan with them.
I consider this another P.R. gaffe.

Considering that we have already gotten our Clients a Pre-Approval so that we can Show-and-Tell, now we have to make them jump through another hoop: It doesn;t make the Buyer feel warm and fuzzy with the Bank/Seller, just the opposite!

But nobady gave the Bamks high marks for Customer Relations.
0 votes Thank Flag Link Wed Sep 21, 2011
Hi Mike,

Check the link out below. I think it may be of value to you.

Best Regards,

Eric Soderlund
0 votes Thank Flag Link Wed Sep 21, 2011
Hi Mike,
Unfortunately, your clients may have to cross approve with their lender. Then, write the cleanest offer possible including shortest escrow and shortest contingency times.
Good luck,
0 votes Thank Flag Link Wed Sep 21, 2011
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