Home Buying in Kenwood>Question Details

Annuka, Home Buyer in 55419

first time home buyers need help!!

Asked by Annuka, 55419 Sun Mar 2, 2008

We are interested in putting in an offer on an REO property but are unsure of what type of offer to make. The house is listed at 205,000 and has been on the market for about a month with no other offers that we are aware of. We are extremely interested in getting this home but do not want to place to high of an offer. Any ideas on how to place an REO offer, HELP!!!

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Voices Member’s answer
Look at comps in the area to see what kind of comps are out there. Most REO properties are listed to sell quick because the longer the property is on the market the more money the lender has in carrying costs. Make sure to not make a to big of a lowball offer or the lender might not choose to work with you. All homes sold from lenders come with an 'As Is' addendum, be careful when writing your offer on the property to make sure you understand everything that is in the addendum. Good luck.
1 vote Thank Flag Link Wed Apr 30, 2008
Hi Annuka.......

There is some great advice below, however, the best advice is utilizing a seasoned agent in an instance like this. Make sure they do a complete market analysis of the property and also homes in the surrounding area. REO's are Buyer beware and you'll want as much knowledge and insight on your side going into this type of transaction. Also, be sure you have your financing in place and solid before you even start the process.

Thanks, Tood Norsted
Web Reference: http://www.toddnorsted.com
1 vote Thank Flag Link Mon Mar 3, 2008
As a first time home buyer you should consult and work with a real estate agent before putting an offer on any type of property.
1 vote Thank Flag Link Sun Mar 2, 2008
I would suggest you use an agent or real estate attorney to draft an offer for you. However, most banks will respond with a lengthy addendum outlining the terms they will accept, many of which are quite harsh from a buyer's point of view ,and you should have professional guideance to ensure you understand all the pitfalls and ramifications of these addendums. You should carefully look at comparable sales data and the level of improvements the property may need that you'll have to outlay additional funds for before you determine what dollar amount you wish to offer. Banks are reticent to do improvements, so you will probably be on your own. You'll also need to ensure your financing for the property is lined up before you make the offer as the bank will look at your qualificatons very carefully before they commit to a contract with you.
0 votes Thank Flag Link Thu May 1, 2008
Hi Annuka,

I would have to agree with Todd. There are lots of problems that can come up when dealing with banks as most of them require that you use their purchase agreements....many of which can be very tricky and very one-sided. Use an experienced agent and potentially have an attorney review any addendums the bank sends back to you. Experience can help protect you from costly mistakes and help you take advantage of some really great deals.
0 votes Thank Flag Link Tue Apr 29, 2008
Annuka, I would strongly recommend you work with an agent who is versed in doing deals on REO and Short-Sale homes. You need a person that can coach you through the process and advise you on what is in your best interest. The listing broker is working for the bank and can provide dual agency but this is not in your best interest. When you enter into dual agency with the listing agent their hand are tied and it is hare for them to represent you to the best of their ability. Why? Because of their fiduciary obligations to their client the bank. My partner and I specialize in representing buyers when purchasing REO properties and Short-sale properties. If you are interested in a FREE consultation please click on the web reference link below to contact me.

If you decide to do it on your own you are costing yourself a lot of money. A Realtor exclusively representing you will save you a lot of $$$$$ on an REO or Short-Sale transaction. Oh, and did I mention it is FREE to use a Realtor to represent you when you buy a home. Thanks!
0 votes Thank Flag Link Mon Mar 3, 2008
Hi, you have alot of great advice already posted. However I thought I would add this. Find a local Real Estate agent and have them do a CMA (cost market anlysis) for you on the property you are interested in. I make it a point to do that for my buyers to compare the property's worth.
0 votes Thank Flag Link Mon Mar 3, 2008
Hi Annuka -

The best way to know what price you should offer is to know what other comparable homes are selling for in the area. There are a couple of questions that I would have in your position: Do I have a good sense of what other similar homes are selling for in the neighborhood? Do I have a good handle on what, if any, work is needed on this home? If similar homes in that neighborhood are selling for $200,000 but this home needs about $10,000 in repairs, you need to take that into account.

Good luck and please let me know if you need additional information.
0 votes Thank Flag Link Mon Mar 3, 2008
0 votes Thank Flag Link Sun Mar 2, 2008
In my experience I've found that most REO's are priced pretty close to what the bank wants and needs. Many of the REO's are properties that were purchased in the past couple of years with little or no down payment and the current market value of many of the homes are now lower. You can make any offer that you feel is reasonable, however, if it is unacceptable, they will most likely let you know right away. You have to remember that there are 4 things that can happen when you present an offer: 1. They can accept it; 2. They can flat out reject it. 3. They can counter it or 4. There is always the chance that someone else may bring an offer to the table and you can only negotiate with one offer at a time - if the other offer is better, you could lose out all together.

What market are you looking to buy in?
0 votes Thank Flag Link Sun Mar 2, 2008
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