Foreclosure Question for a flip deal

[Janine Kelbach]

Hi everyone,

We are cash investors starting out in the Northeast Ohio region. We are looking to find some flips in the Lake County area. We found some foreclosures and found the banks tied to them. We see them listed as "foreclosure" on Zillow. 

Should we be making offers on these properties directly to the bank? 

We have made one offer on a house recently and were turned down, but we are pushing forward and ready to try again!

Thanks!

Janine and Adam. 

[Account Closed]

Originally posted by @Janine Kelbach:

Hi everyone,

We are cash investors starting out in the Northeast Ohio region. We are looking to find some flips in the Lake County area. We found some foreclosures and found the banks tied to them. We see them listed as "foreclosure" on Zillow. 

Should we be making offers on these properties directly to the bank? 

We have made one offer on a house recently and were turned down, but we are pushing forward and ready to try again!

Thanks!

Janine and Adam. 

The three basic steps in foreclosure (there are more steps but this is to answer your question) are 1. pre-foreclosure, 2. Auction and 3. REO. (Real Estate Owned)

1. pre-foreclosure - If you mean that the house hasn't yet gone to Auction, then it is pre-foreclosure, you contact the owner.

2. Auction - If you mean attending the Auction, you bid at the auction. Call the trustee and find out what rules of the auction are. 

3. REO - If you mean the property went through the Auction process and nobody bid on the property, then the bank owns the property as a REO.

It seems you are referencing REO. Once the bank has the property they will have a realtor do a BPO (Broker Price Opinion) and put the property into the MLS. If you make an offer during this period, some banks will look at the offer as long as it meets their format specs. That means if the offer complies with the "paperwork and formatting requirements of the bank". They want fast closings, guaranteed closings, no "subject to inspection" and no "subject to financing".

Some banks will not look at the offer and will always put it on the MLS (then you deal with the listing agent). Some loans are insured by we as taxpayers and depending on a whole lot of variables, the bank will decide to look or not look at your offer, for random reasons.