Buying an REO can be an extremly trying experience. The banks have no respect for the CAR contract, and it takes forever to get any kind of response. It is not unusual to not get a signed contract back for weeks if ever. Part of the problem is that in these huge corporations it is hard to get anyone to take responsibility enough to sign the contract or any counter offers. Instead your paper work will be shuttled from one desk to another.
When you do get a response you might get a huge counter, I'm talking about 10-20 pages that attempt to get you to sign away all your rights as a buyer in California.
Another problem is that each bank will have its own process, so there is no conformity across the industry.
The only thing to say is to hang in there if you really want the house. Be prepared for the process to take a long time, and to be preplexed by the response or lack of response from the bank.
It sounds like you have a good agent. Trust them, and do not sign anything you do not feel comfortable with.
Depending on your price point, there may be multiple offers on a property. The trick to proving that you arethe best Buyer is to:
(1) Have your mortgage approved, not just pre-qualified. Sometimes called "credit approval", this tells the Bank that your financing is already in place.
(2) Offer to close escrow in 21 days if your Lender can do it.
(3) Reduce the time period for your contingencies from 17 days to 10 days.
(4) Give proof with your offer that you have the cash needed to close.
(5) If you're asking for closing costs, ask for no more than 3% of the purchase price.
There are many more tips and tricks, but these should help. Let me know (firstname.lastname@example.org) if you need anything else. Thanks fo rthe opportunity to help!
It ain't rocket science, just good service. While many competent individuals post on Trulia Voices, several are either factually incorrect or just plain wrong. Always cross-check the answers you receive and don't be afraid to ask the responder to PROVE IT.
Purchasing a REO is the best way for novice real estate buyers to get a good deal on a home. But, you need to be aggressive with the bank's realtor. When you submit your offer, be sure to be pre-approved for your loan and let them know what cash you have. Banks like cash because that can speed up the closing process. You need to make them an offer they cannot refuse. Otherwise, the bank will let your offer sit on their agent's desk until a more appealing offer comes through. BE TOUGH. It will take longer and will be more frustrating. But, hey anything worth doing will.
In our recent office meeting we all talked about our experiences with REO's and have come to this conclusion....Put yourself in the banks position. If 1 bank has 6 homes in one particular neighborhood, the price they allow the 1st home to sell at affects the price of the rest of their properties. This is why they are waiting to accept an offer (sometimes weeks) they are waiting for â€œthe highest and best price.â€ I am hearing this phrased from listing agents of the properties I have been writing offerâ€™s on for clients.
In my area of California, we are seeing bottom in certain square footages. The fastest selling homes are in the 3,000 to 3,500sf range. When a "nice" REO comes on the market at a good price it will have multiple offer's within the matter of days...sometimes the same day it goes on the market.
I spoke to an agent who is listing REO's, she had 19 offers on 1 home and the bank asked her to send only the top 6 for their review. The other 12 were completely rejected. The top 6 will then receive a "multiple counter offer".
When a property receives 20 offer's it's the bottom of pricing for that particular size home in its neighborhood. Sellers do not determine value; agents donâ€™t determine prices the buyer does. A home is only worth what a buyer will pay.
Yes, I will not deny the fact that sometimes buying REO properties can be so frustrating and I think the media adds to your frustration because there is a wrong impression outthere that these foreclosed properties are totally distressed and depressed. Let me use my French, Au Contraire. If the property is priced right and it is in the right location, be ready to pay full price, if not a little bit more than asking. A number of my listings are short sales and REOs and I am getting good responses from them. Taking your contractor to have a cursory look maybe a disadvantage for you because I am not sure what your contractor's agenda is. The only thing that you have to worry about is the Market Value of this property. Have your agent look at the most current comparables in the area and that should be your primary basis in making an offer. Listing Agents on this REOs do not have the benefit of thinking. We submit all your offers to the bank and the bank comes back with the response on which offer we'll accept so please, be more rational on your choices and how you make your offer.