Next step...

[Curtis Cecil]

So after looking around at a few houses, my partners and I have found a property that we can to purchase and flip. The house is a foreclosure and it is owned by a bank. We viewed the house and found that it was stripped of everything in the house and needs a complete gut and rehab.

Mind you even the roof mounted air conditioning was ripped out so it need probably about 40-45k in work.

Now it's list at almost 60k and it is in no way worth that amount. Not even 10k but we are willing to put 15-20k cash to them to get it. My question is this, I found which bank holds the loan and found that Fannie Mae owns that company.

Should we just have our realtor put our offer in or is there a way to speak someone directly to tell them our offer and why we are offering such a lower price? What would be the best step to secure this home?

Thanks for any information.

[Carla Reid]

If you went directly to the bank, at this point, you would most likely be referred back to the listing agent since the property is already listed.

Before making an aggressive offer, some homework is in order, your agent will need to effectively explain why the price should be lower and the reasons they should accept your offer. Including a cover letter explaining exactly where that number came from can help your case.

While alot of fellow investors will advocate going directly to the listing agent, I don't agree. Unless you have a VERY solid, established relationship with this agent, you're not going to get very far.

What most people don't understand (because they've never worked on the inside of an REO brokerage) is that the listing agents are graded very stringently on gettting 85-90% of list price. If they continually sell homes for less than the 85%, they run a very good chance of losing those accounts.

Point being, you're not going to find very many listing agents willing to write up explanations as to why their AM should now accept an offer significantly below what they indicated to the AM that the market would bear for their asset.

Like Brandon indicated, you want to make sure your agent is experienced in negotiating REO offers.

Good luck with your offer! Tempe is a great market, and I hope you get your deal. :D