REO QUESTION

[Sib Bahjat]

I am looking to place a contract on a REO listing. My question is, if I place a full offer to lock up the property will I have an option to back out based on the inspection? Will I lose my EM ?

[Will Barnard]

Sib, I am going to be harsh here and for only one reason, to PROTECT YOU.
If you don't know the answer to your own question, you should not be making offers yet, you should be studying and educating yourself first.

Now, to answer your question, in TX, you should be using the standard TX purchase agreement which includes an "option" period. Typically, you pay $100 for 10 days and you have the right/option to back out for ANY reason whatsover with a full refund of your EMD. All you lose is your $100.
Secondly, there are several contingencies you can place into that or any other contract. One of which is an inspection period, however, please keep in mind that the longer contingency period you ask for, the weaker your offer. if you intend to get good deals on REO properties, your best bet is all cash, large EMD, and no contingencies (or at least keep them to 5 days or less.

keep in mind that your offer is not binding until you open escrow with a fully executed contract and send in your EMD. Thus, you can make offers with 0 days contingencies and once you get your verbal acceptance, you can run out and perform your inspections that day through the next before you have to send in the EMD. You can also stipulate in contracts that the EMD will be sent into escrow 3 within 3 days of escrow opening.

Hope that helps.

Will Barnard
Barnard Enterprises, Inc.