Rgoldine, Home Buyer in oc, ca

What is the best way to submit offer for REO prop.? Does bank pay for closing and my agents fees?

Asked by Rgoldine, oc, ca Mon Jul 21, 2008

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Hi Rgoldine,

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 “regular” 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.)
Web Reference: http://www.OCBeachBlog.com
2 votes Thank Flag Link Thu Jul 24, 2008
As Lisa has stated, every REO is different. Your agent should communicate with the listing agent to find out as much as possible about the listing before submitting your offer. All good offers will include a pre approval letter, a good deposit, proof of funds, and possibly a letter if necessary. Your agent fees are paid by the seller, and closing costs might be negotiated with your offer, depending on the listing.

Jeremy Lehman
Century 21 Beachside Realtors
Web Reference: http://www.LehmanHomes.net
2 votes Thank Flag Link Tue Jul 22, 2008

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.

Good luck!

Lisa Cartolano
Alain Pinel Realtors
2 votes Thank Flag Link Mon Jul 21, 2008
If the property is well priced, have your agent write a clean offer at asking or above asking price with a 30-day or less escrow time that makes it easy for the bank to accept. Submit with a bank pre-approval letter, proof of funds and a copy of your deposit check. You are buying the property "As Is". The bank pays for your agent fees. You pay for your own escrow fees, title fees and other closing costs. Typically, the bank will not pay for your closing costs as they have usually offered the property at below comparable sales.

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.
2 votes Thank Flag Link Mon Jul 21, 2008
I would have to say with a pre approval letter with a reputable lender. The banks will pay the agents fees and typically pay closing cost as well.
1 vote Thank Flag Link Mon Jul 21, 2008
You asked about the best way to submit offer for REO property. I recommend that you always use a qualified Realtor agent who has some experience and valuable information in the area of the home of your interest. Make sure your Realtor is working for you carefully. Best wishes.

Harrison K. Long, Explore Group Properties, Coldwell Banker Previews

For a great home and property search, check out
0 votes Thank Flag Link Wed Dec 10, 2008
Unless you are an experienced investor, (and possibly even then) the best way is to have a real estate agent handle it for you. Before submitting an offer, your agent should gather as much information as possible regarding the property from the listing agent. You should then submit an offer along with a pre-approval letter, proof of funds and a cover letter.

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.
Web Reference: http://www.donovanblatt.com
0 votes Thank Flag Link Tue Jul 22, 2008
Buying an REO house can be complex. Hire a real estate agent - don't do this yourself - too important.
0 votes Thank Flag Link Tue Jul 22, 2008
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