Our FHA loan is already on the go!! Approved for 300k.. we had our first offer at 5k over list price, and

Asked by Nannette, 91706 Thu May 22, 2008

another offer on another property at 10k over list price ( i know its also all dependent if they would accept my contingencies) this is three weeks in between and they are both REO!!! none have responded yet and its been almost a month. is there any standard guidelines on processing REO's? with an FHA loan we feel it is more secure for the bank and probability of acceptance is more advantageous, but most of the houses in the area we like are all messed up!! is there anybody who is good on REOs? and any listings we could find on the web that are FHA approved? Help!! we feel we are running out of time!!

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Nannette, Home Buyer, 91706
Thu Feb 5, 2009
to all of you thank you very much!! I was able to close on a house on aug 22, 2008 i did not go over the price, they covered half of my closing cost plus 4k of repairs and update in a move in condition house on a 8,000 square foot lot. patience and research is the key. i have saved a lot of money by having no agent. i used to be a personal banker in a bank that is why i have some ideas about it. with a 3 percent down and extra legwork all i did was pay the inspection and appraisal of the house. we filed our income tax and that we recovered our downpayment from it, because we bought a foreclosed home. In 5 years time, we are planning to buy an investment house, if the market keep on going downhill (to save at least 20% for dp +++) i think i would say, we have made the right decision on just getting our foot in the door. goodluck to everybody!!! By the way, i closed 282,500 for a house that is used to be a 430,000 list price on the market in january 2007 and it was REO'd in January 2008.
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Charita King…, , Downey, CA
Wed May 28, 2008
It looks like there are higher offers with higher downpaymnet. If you are working with a realtor, your realtor should know that REOs are usually priced lower to attract buyers. Also, if the property is a fixer and you have FHA? It's likely will not go through. Check with your bank first and find out what type of properties acceptable for the type of program.
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Byron Guille…, Agent, Granada Hills, CA
Sat May 24, 2008
Are you working with a Realtor? If you are is he/she an REO expert? Buying an REO with FHA loan can be easily done in certain areas that are FHA exclusive. But, if you are FHA approved you must don't buy an REO if it is a fixer upper unless you are under the 203k loan guidelines. To tell you the truth FHA buyers are competing with Cash Only investors, it may take sometime for you to find the right property. Time is the essence buying an REO, and patience is the key to it.

Good Luck!
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Oc Buyer, Home Buyer, CDM
Thu May 22, 2008
We bought two REO's in the last 7 months. We just bought a Citi owned REO and one of their clauses was that the seller would not pay for nor credit buyer's for VA, FHA or other loan/financing costs or fees.

Are you asking for credits for the loan? What other contingencies do you have? We found that if we shortened the inspection contingency to 10 days and offered a 30 day or less escrow, the banks were pretty keen to counter with us. What are you offering for earnest deposit? They really like at least 1% of the purchase price.

As far as the FHA goes, you need to make sure that the property doesn't need anything major or else FHA won't take it. The problem may be that the bank doesn't know if the property will pass FHA or not. The listing agent should be able to speak iwth the asset manager to discuss whether the property is at risk of falling outside of FHA guidelines without any repairs or credits in escrow. You may also have the option of putting required repairs in an escrow account. The agents should be able to discuss this.
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Paul Dumke, Agent, Stevensville, MI
Thu May 22, 2008
Hopefully you are approved for an FHA 203k (rehab loan), when working with REOs.
Many banks I have worked with will not even respond to an offer with ANY contingencies, and many will not respond to goverment backed loan programs unless it`s rehab because they don`t want to deal with passing inspections or instituting repairs.
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Debt Free Da…, , 85260
Thu May 22, 2008
Banks can be a pain when it comes to reo's. Unfortunately they can take their sweet time.
Web Reference:  http://getprequalified.com
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Myke, Home Buyer, 89449
Thu May 22, 2008
when you're dealing with REOs - do not expect any kind of standard anything.
You may end up waiting a couple weeks for answers - you may end up waiting months for an answer.
Banks work at thier own pace, under thier own guidelines.

You really should have an agent who is experienced specifically in REO property to handle these types of things for you. It sounds like if you have an agent working for you - they either do not know, or did not bother to explain the process to you.
If you do not have an agent working for you on this - get one, asap. This is not something that even an educated and intelligent person can do easily - and honestly most agents even have a hard time doing it right.
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