REO Coversheet
I wanted to write quick post on REO offers.
Last Monday (eight days ago), I submitted 9 REO offers. The offers were simply on an Arizona REALTOR contract with the appropriate addendum's. I received two response/counters in a weeks time frame.
Yesterday, I submitted 9 REO offers. The offers were on the same contract, but this time I included a cover page that states the following:
For clarity, it is written from my realtor's point of view.
Please see attached offer for the property located at Insert Property Address. This contract contains the following:
Ø ALL CASH offer for the amount of $81782.00
Ø Earnest money of $2500.00 Ø 5 days inspection
Ø 15 day close
Ø No financing contingency
Ø Buyers bank statement showing proof of funds
Ø Copy of buyers escrow check
My client has made multiple offers on several properties. If another offer is accepted before this one, he still may chose to buy it with private or hard money. If that is the case, it will be disclosed to you as soon as possible.
If you have any questions for comments my contact information is below. I look forward to a successful close.
I received 4 responses within 24 hours, and two of the four were counters, one was a rejection, and one was "we need another form filled out". Bottomline is though you get faster responses. I have no other statistical data other than the cover letters makes it simple for them. They can see what is without sifting through 12 pages of contract.
If you do not use a cover letter, try it and see if you get quicker response times. Just food for thought.
Comments (18)
The cover letter is a good idea. I was addressing the clause which says he is making offers on OTHER properties. And, yes, after 30 yrs in the biz, I might be aware that Sellers, not agents, accept offers. But, if you have ever had a listing, you know that we help the Seller decide what is the best offer, not always the highest.
Guy Berry, about 15 years ago
If I could vote your comment up Nick, I would. Great comment.
James Ward, about 15 years ago
Paul, I think you're completely missing the point as well. The cover letter isn't even required. It has nothing to do with the offer or it getting accepted, it has nothing to do with gatekeeping or seller interests. Its just a simple cover letter. Quit over complicating it.
Nick J., about 15 years ago
Hi all, the cover letter is for both realtor and bank. The realtor, although not responsible for the acceptance, is nonetheless a "gater keeper"..and working to get both gaterkeeper and seller interested only makes you better than the rest.
Paul Mangelson, about 15 years ago
Great idea Justin. Thanks for sharing. It is unfortunate that some fellow agents forget their fudiciary duty to their clients, and take offers personally as if it is their home. Unless the seller specifically states in writing that the agent is not to bring offers below a certain amount, they must present the offer to them. I run into this problem all too often with listing agents. I have to remind them that ALL offers are to be presented. It's not up to the agent to accept the offer. Those types of comments really make me shake my head.
Carla Reid, about 15 years ago
@Nick and Justin- there are so many people who come on the internet as "GURUS" or "EXPERTS" yet post conflicting replies such as what GUY just did. it's sad. You'd think the Real Estate "CONSULTANT" would know such a trivial fact...truly a cause to raise an eyebrow. In any case great post Justin. I personally include cover letters with my offers as well. I'm also a believer in the numbers game as i'm venturing into a new market and need to let people know who i am and how i can be of benefit to them(ie cash + fast closings) Happy Investing! Desmond Kamere Realty Group, LLC
Des Shei, about 15 years ago
Great post Justin. I'm surprised that a Real Estate Trainer Extraordinaire doesn't understand the listing agent is NOT the seller and therefor is NOT the one who ACCEPTS the offer or not. Maybe I'm missing something as well, oh wait, no I'm not. I remember reading an article by some hotshot that was similar in reasoning for cover letters. I'm not surprised the same concept although not new or a trade secret does well for other strategies.
Nick J., about 15 years ago
@ Becca- I have not included reasons for my low offer, I've just tried to showcase why my offer is better. (no inspection, no finanicing contigency, etc.) You could include a repair estimate, but I would not do it until they counter or ask for justification. In most cases they do not ask. @Guy - A listing agent does not accept offers, the seller does and in my case the bank. The point of the coversheet is to make it easy for the bank to see what my offer is versus having them flip through 12 pages of contracts. Generally the purchase price is on the first page. They may not like my purchase price without seeing that I'm performing a shorter inspection period, all cash, quick close, etc. The point of it is to let the bank see the whole picture versus judging a book by its cover.
Justin S., about 15 years ago
why would a listing agent with multiple offers accept this offer over the others? What am I missing
Guy Berry, about 15 years ago
I have been thinking about including cover letters with my REO offers. I am only beginning. I have made 4 offers and have not received a counter or an acceptance. They also take a long time to respond. Have you tried including reasons for your low offer? How do you think that would go?
Becca, about 15 years ago
Guy- There is nothing to accept nor deny. It is a cover page that goes along with the contract and addendum's. What would you prefer it to say?
Justin S., about 15 years ago
If you presented that on my property, I would not accept it.
Guy Berry, about 15 years ago
A great helpful nugget Justin, thx!!
Ted Harris, about 15 years ago
James- Yes, I am trying to get into REO's or auction properties. It is proving very difficult in my market without pocket listings. Even the pre-MLS deals presented to me are not good deals. The 70% rule in AZ has been thrown out the window, which makes it great for wholesalers but crappy for rehabbers. I'm playing the numbers game right now. Submitting lots of offers and see who bites. I automated it, so its fairly easy but still depressing when you submit 20 offers and get 1 or 2 counters. The best deals are still short sales on ugly houses.
Justin S., about 15 years ago
Pretty cool stuff Justin. Are you now getting into REO's? Keep posting about you deals, I am a little interested in trying to get a REO.
James Ward, about 15 years ago
Justin- Awesome stuff. I think the exact same should be said about short sales! Explaining all the benefits of your offer is key.
Alex, about 15 years ago
Will - I'm trying to build those relationships, believe me. No one seems to care about until I buy a property so I need to prove to them I'm a buyer first. After that, it should get easier. Any tips on building the relationship?
Justin S., about 15 years ago
Cover letters are a great method to gaining more specific attention to your offers when you play the numbers game. As you know, I don't play that game and don't make 10+ offers each week. I choose the relationship method and go for properties befor the MLS. In the past 4 weeks, I have made offers on only 4 properties and have had 3 accepted. I am also waiting for due diligence info on several others, which I will most likely make offers on that will get accepted.
Will Barnard, about 15 years ago