You are going to have to put your best foot forward, first. The banks call it the "highest & best" offer. While sometimes the banks will counter all offers submitted, this is rare based on my experience with these properties over the past year.
1. Put your highest offer in. This is the price that anything above that would mean you are willing to walk away from the home.
2. A pre-approval letter isn't worth the paper it is written on when trying to purchase one of these properties and the banks know it. They write them all day long... You need to submit all of your information to your lender and have an approval letter stating that an underwriter has already reviewed your ability to qualify for the mortgage. This doesn't happen with pre-approval letters. (I have a sample letter I can get to you.)
3. You will need to have your "proof of funds" to submit with your offer. This is a copy of a bank statement (or wherever else the money is coming from) with any social security numbers and account #'s blacked out showing enough money to cover what you are stating in the finance section of the purchase agreement.
4. Purchasing an REO is about the same as purchasing a â€œregularâ€ re-sale home. The commission paid to your buyer agent is already stipulated I the agreement between the listing agent and the bank. Expect to do some diligent inspections since you will be getting less disclosure than a regular sale.
5. We have been seeing some closing costs paid by the bank with these sales. Whether that will happen on any particular property that you are trying to purchase will depend on what the other offers look like.
In the areas which I have been working with Bank Owned properties, which is Newport Beach, Corona del Mar, Newport Coast , Laguna Beach, Irvine, Huntington Beach & Costa Mesa, the Bank Owned Properties have been selling from -5% of the asking price to over asking. These properties usually have 5-20+ offers on them, especially anything below a million dollars.
If you have any other questions about how to purchase an REO, or even a short sale, feel free to call me. We can go over it one on one or you can attend, for free, one of my foreclosure seminars.
We talk about the different types of foreclosures, how you need to submit the offers, what you can expect when you are in escrow, which types of foreclosures are the best deal and then we open it up for questions from those who are attending. (That's the fun part.)
Century 21 Beachside Realtors
Every REO can be a little different. REO's are typically listed by Realtors as any other property is. The seller, in this case the bank that owns the property, pays agent fees. Closing costs are not always included and sometimes can be negotiated, but this is on a case by case basis.
If you are looking to purchase a bank owned property I would suggest you work with a Realtor who can help you located and negotiate these types of deals for you.
As mentioned in a previous post, you will want to be pre-approved with a reputable company before submitting an offer.
Alain Pinel Realtors
If you would like an easy way to search for Bank Owned or Short Sale property in Huntington Beach or Orange County, visit the web link below.
Harrison K. Long, Explore Group Properties, Coldwell Banker Previews
For a great home and property search, check out
Your agent's fees are paid by the bank. The bank may pay for closing costs, though most do not. If they are to pay for closing costs, it may require that you increase your purchase price to encompass the closing costs.
When you buy an REO, expect that the bank will not pay to make repairs. You are buying the home as is, which makes inspections very important.