Five Ways to Make Your REO Offers Irresistible to the Bank

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It’s no secret that there are some great deals available on the mls right now in the form of REOs and short sales.  I’ve been wholesaling REOs off of the mls for the last two years, and have learned a thing or two about what the banks are looking for in an offer.

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Five Tips for Making REO Offers That Get Accepted

Whether you are trying to get the bank to give you a substantial discount off of list price, or you want to snag a great deal that just hit the mls, implementing the following five strategies will greatly increase your chances of getting an accepted offer.

1)  Make Cash REO Offers

When I first started going after REO properties, I was submitting a pre-qualification letter from a hard money lender with my offers, and using a financing contingency.

After about 3 months of making offers and getting none accepted, I decided to do a little research on the mls.  I was shocked to see that many of the properties I was losing out on were being sold to cash buyers FOR LESS than what I had offered.

I quickly switched my strategy and started submitting cash offers using a statement from a line of credit as my proof of funds.

After doing this, I noticed a DRAMATIC difference in the response I was getting from the bank.  Instead of my offers being ignored,  I was now getting counters from the bank, and eventually started getting some acceptances.

2) Drop the Inspection Contingency

If you want to make your offers stand out to the banks and show them you are serious- do your due diligence ahead of time, and drop the inspection contingency from your offer.

On more than one occasion, I’ve had listing agents tell me that the bank was taking my offer over the others because mine was the only one submitted without an inspection contingency.

If you decide to keep the inspection contingency in your offer, try to limit it to only a day or two, and also keep in mind that most of the time, the banks will include an inspection period in their addendum.  Many times, I make offers declining an inspection period, and end up getting one anyway because it is included as part of the bank’s addendum.

3) Give the Listing Agent Both Sides of the Commission

Many listing agents will go the extra mile to get your deal pushed through when you are giving them both sides of the commission.

It took me awhile to catch on to this strategy, but once I started implementing it, my acceptance rate improved remarkably.

Many people believe that it makes no difference whether or not the agent gets both sides of the commission- the agent, after all, is supposed to have their client’s best interest in mind, and such things shouldn’t matter when they are presenting the offer to the seller.  While that sounds great in theory, I can tell you from experience it is not the case in most instances.

4)  Offer a Large Earnest Money Deposit

When it comes to earnest money deposits- the bigger the better!

If you want to get the bank’s attention, put your money where your mouth is and offer up a substantial deposit.   It also helps to include a copy of the deposit (in certified funds) when you submit your offer.

By far, the biggest discounts I have received on REO properties came when I was offering 5k or more as an earnest money deposit.

5) Offer a Quick Closing

Even though the banks usually need a month or more to get a deal to the closing table, offering a fast closing will make your offer appear much stronger in their eyes.

I always offer to close in 5 days, and even though I know the bank will most likely not be able to get it done in that short of a time frame (they usually will counter back with a closing date of 3 weeks or more), it still sends the message that I mean business.

While there is no way to guarantee that your offer is going to be accepted, if you start implementing one or more of these tactics when you are submitting your offers to the bank, your chances of an acceptance will increase dramatically.

Photo Credit: notionscapital / CC BY 2.0

About Author

Formerly a bartender, Steph Davis is now a full time wholesaler in Tampa, FL. If you'd like to get an idea of what it's really like out there in the trenches, head on over to her blog:!


  1. Great information Steph! One thing I have a problem with though is that if I make a cash offer, the banks are requiring a 10% deposit, which I usually don’t have. It is true that bigger deposits show you mean business though! I just got under contract on a great REO deal for a 4 unit building and I think my chunky earnest money check helped along the negotiations! 🙂

  2. Hi Melody,

    Congrats on the 4 unit..

    My experience has been that only certain lenders will ask for 10% as an EMD. Fannie Mae is one of them, and there are a few others who do, too.

    Most of the ones I’ve offered on, though, were fine with a 1k deposit even when I’m offering cash.

    Hope all is well with you,

    Steph 🙂

  3. Well said. However, over the last few months I haven’t noticed a difference with cash offers. I guess the banks are so swamped with offers on reo’s they’re getting thrown in piles with everyone elses offers. This is Florida though, I can’t speak for the rest of the country.

  4. wow 5 day close!? i know most of the time they counter more, but my luck they would say GREAT!! and now im hopeing my end buyer actually want it. Well, im just looking again for a title company that will help me out, and its time to offer on some places these guys “say” they are looking for! Great article!

  5. Hi Steph, first, great info! Second you talk about a line of credit statement. i know what a line of credit is but can u elaborate where you got it, was it a line of credit backed by one of your HM lenders?

  6. I’m currently in the process of closing on an REO. I tried offerring $5K earnest money to show I was serious but got beat out by another offer that was only several grand higher with just he standard $1K earnest money so while I hear money talks it seems some asset managers care more about the bottom line than about days on market. I found this out because that offer fell through and I picked up the second time around. That and my agent had a good rapport with the listing agent.

    I also offerred a quick close- 10 days. The title company the bank chose is what is holding up the closing now and the contract says 7 days from when the title work is complete. So in this case I agree you can make your closing period unrealistically tight and feel confident that something else will hold up closing.

  7. I can see why dropping the inspection contingency is VERY appealing to the bank however, and this might seem like a dumb question but if you drop you that clause, are you putting in any another kind of “out” clause in case you don’t find an end buyer?

  8. Junior Salters on

    What kind of statement for line of credit did you use if you don’t mind me asking? I’m a little confused at that part? So pre-approval letters are a no-no?

  9. Great article, but I’ve found banks to be somewhat inconsistent and unpredictable with their reaction to offers. For example, I’ve followed the 5 tips above only to find that I get no response from the bank. Whereas in other cases, I’ve submitted a normal offer without following any of the tips and received a counter within days.

    I’m curious, does anyone know the standard process that banks follow for evaluating/approving offers? Are they looking to get some debt/value ratio out of the deal? Are they usually knowledgeable about the specific property?

  10. I know this article is old, my question is, say your bidding on 45k reo duplexes and you take away all contingencies (because I scoped it already with an inspector) and offer all cash earnest money, whats the most you can expect to cut off the price?
    Basically giving them a check for 35k earnest money for the duplex, would that fly or is the discount not as much?

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