REO offer procedure questions

[Phil M.]

My partner and I spent all of our saturday searching local REO properties in our area. All together we looked at 28 of them mostly semi-attached, single-family or 2 family homes. Now, we got out of the car, checked them out, saw if they had curb appeal, looked if they had any cosmetic problems that we could spot out early, peaked through the windows to see if the interiors were beat up and basically determined if we would want to go any further with them. All in all, we figure probably could get a deal if we could make offers on them.

So, that being said, how exactly does the offer procedure go about? My partner is going to call all the listing agents Monday, and schedule walk-throughs for next weekend. After that, I assume we would make our offers. I've read on other threads that you would only make the offer to the listing agent, and that it should be in contract form. Others have said it should be a cover letter that you give to the agent. I would prefer it to be more of a letter instead of a contract because we will be making several offers, and don't want to be contractually obligated to do anything before we see which figure out which property will be most ideal for us (even if we get accepted on multiple properties).

So whats the best way? I would assume I'd include the following
- Make an offer 70-80% of asking price
- We have ability to close within 30 days
- Paying cash (we will not be using conventional loan)

Should it be notorized?
Should we offer to make a deposit or offer earnest money?
Also, many people say that we should include a pre-approval letter, but since we are using a private loan from a private lender, what should we provide as proof of funds?

[J Scott]

To add to what Jon said...

- If the property is a good deal, it won't last until next weekend, so schedule your walk-through for sometime in the next day or two. If the property is still available next weekend, it's likely not a great deal anywhere near the current list price.

- You don't need to deal just with the listing agent. I know a lot of people suggest it, but on your first couple offers, I think there are more advantages to using a buyer's agent to represent you. If you go directly to the listing agent, that agent represents the SELLER, not you! This means, he or she will allow you to do something stupid that hurts your position and helps the seller's position. If you find your own agent to represent you, that agent is required to make sure your best interests are put first; this may keep you from doing anything really stupid. So, go find an agent that is accustomed to making offers on REOs, and ask that agent to represent you. He or she can walk you through the house and then write up your offer for you if you're interested in submitting one.

- When you're ready to submit an offer, the agent is going to want to know some basic information:

o Your offer price
o The amount of earnest money you want to put down
o The date you want to close
o The name you want to make the offer in (your name, company name, etc)
o What contingencies you want and for how long (financing, inspection, appraisal, etc)

If you give the agent these basic pieces of info (he or she will tell you what they need), they can write up the offer for you.