Dallas Relocation – Buying a Dallas REO Home
Are you relocating to Dallas Texas and you want to find a great value on a Dallas REO Home? A REO home is a home that was foreclosed on by the bank and now the bank owns the home, REO = Real Estate Owned. Lots of savvy home buyers want to hit the “jackpot” and find that Dallas REO home many of which are often under priced. When banks price these REO homes under the prices of other homes in the community it often results on multiple offers on that home. This means you could be up against some strong competition for that home. It's not that unusual for some of these REO homes to receive 5 or 10 offers. Sometimes the bank will disregard all but two offers and then request that the selected buyers resubmit their Highest, Best and Final offer. Sometimes the bank will simply accept the best offer at inception. If you want to know how you can make your offer rise above all the rest and become the winning offer, here are a few tips to help you do so: 1) Property History – Get itAsk your Dallas Realtor to find out how much the bank's purchase price on the foreclosure. Compare that price to the price the bank is asking. Look at the amount of loans that were once secured to the property. Somewhere between the original mortgage balance(s) and the foreclosure sale price is the amount the bank will accept, if the home is priced under the comparable homes. 2) Determine Comparable SalesIn most cases, the listing price has very little bearing on the value of the home. The market value of the home carries the most weight. If you are up against other competing offers, other buyers may offer more than list price. · Take a look at the last three months of comparable sales (CMA) for that neighborhood to determine how much this REO home is worth. Try to use only those homes that most closely match the REO home regarding square footage, number of bedrooms, baths, condition and amenities. · Look at the current pending sales. Ask your Realtor to contact the other listing agents of those pending home sales to try to find out the accepted contract price. Some will share that information and others will not. · Look at the active listings as well. Those are most likely the listings other buyers will use to formulate a price because they are the only homes those buyers will actually tour.3) Analyze Listing Agent's REO Sold ComparablesMost REO agents work for only one or two banks. Some of these listing agents are exclusive listing agents for REOs, and they do not list any other type of homes. Since these REO agents deal in volume, they typically apply the same pricing principles on all their REO listings. · Ask your Realtor to look up the listing for theses REO agents in the MLS. · Have them run a search using that listing agent's name to find the last three to six months of that agent's listings. · Have them pull the history of those listings to determine the list-price to sales-price ratio. If many of those listings are selling for, 5% over list price, then you may need to offer 6% over list price, and vice versa.4) Ask About Number of Offers on the REO Home If there are no offers on the REO home, you can offer less than listed price and still get your offer accepted. However, if there are more than two offers, you will most likely need to offer above the asking price. If there are 10 offers, keep in mind that some of those offers might be all cash. Banks like all cash offers. If you are obtaining financing, then you may need to increase the price on your offer to be considered. 5) Submit Your Preapproval LetterIt goes without saying that you do not want a prequalification letter. You want a preapproval. Get preapproved from your lender in advance. Furthermore, get preapproved by the lender who owns the property. Do not expect to use this lender for your loan, but submit the preapproval letter from this lender, along with the letter from your own lender. Banks don't trust other lender preapprovals but they will trust their own. 6) Don't Ask for the Bank to make Repairs / InspectionsOccasionally, banks will pay for repairs, but generally they will not agree to do so. If there are problems found during your home inspection, renegotiate your offer. 7) Shorten the Inspection PeriodIf other buyers ask for 15 days, for example, to conduct inspections, and you ask for 7, you will be deemed the more serious buyer. 8) Offer to Split CostSome REO banks will not pay transfer and other fees. If the buyer offers to split those fees with the bank then the bank will be more likely to accepting the offer. Many banks negotiate discount fees for title insurance. If the bank will pay for the owner's policy, the title policy may cost a little more. But it's still a good idea to let the bank choose title if you want your offer accepted. Consider the Appraisal ConsequencesIf you offer over list price, keep in mind that the appraisal will need to confirm the agreed upon sale price. If you find yourself with a low appraisal, you have options, so don't stress out. Remember, the bank will most likely run into this problem with the next buyer who obtains financing. If your REO home purchase is a result of a Dallas Relocation make sure you use a professional Dallas Realtor to represent your interest in the transaction. Dallas REO’s and Dallas Foreclosures, the terms represent the same thing when it come to buying DFW real estate.
Comments