Making first REO offer

[Kyle Meyers]

I am about to make my first REO offer, any advice on getting it accepted or what to expect would be greatly appreciated.

I read a BP blog post about how to get my offer accepted, and I am planning to remove the inspection contingency, make an all cash offer, large escrow deposit, and offer to close in 5 days. Is there anything else to show I am a serious buyer and want this property?

[Mitch Kronowit]

Originally posted by Kyle Meyers:

I am about to make my first REO offer, any advice on getting it accepted or what to expect would be greatly appreciated.

Congrats! Here's a few things to keep in mind when purchasing REO's.

1. The bank's asset manager, who controls the property for sale, may have very well been serving hamburgers and fries this time last year. They have probably never ever seen the property you're interested in buying and may very well be located clear across the country. Also remember, they have several houses for sale, not just the one you're looking at. Expect delays, stupid questions, and lost paperwork.

2. The listing agent, who represents the bank (seller), could be a very knowledgeable and experienced real estate professional or a complete friggin' moron previously fired by Amway for being too annoying. If the latter, realize what a great team they form with the asset manager. Hide all your firearms and edged weapons during this process. It's simply not worth it.

3. I would not waive the inspection contingency unless you're 110% certain you know the condition of the property and/or are dead set on buying it come hell or high water.

4. Since you're paying all cash, waive the appraisal contingency instead. Do this even if you're financing the purchase and have a very good bead on the property's value and have the funds to cover the difference.

5. Make sure you have valid proof of funds in regards to #4 above. If the asset manager has been on the job for about a week, they might accept a figure scrawled onto a cocktail napkin. However, if they're a hardened veteran of over 3 months as the bank's agent, they may not fall for it.

6. Don't offer to close in 5 days unless you're ABSOLUTELY sure you can do it. Protect your deposit. Ask for an extension long before you think you'll need it.

Good luck. Tell us how it goes.