Found an REO that I would like to make an offer on. My question is do I get an inspection prior to making the offer or submit the offer then get inspected only if accepted.
Thanks guys for your advice in advance.
Do an inspection and do a title search? Are you making the offer through a realtor?
@John Baptiste Well, it is complicated by the fact that you can back out if you find something on the inspection, but they keep your EM as an investor. But inspections for every property you are going to make an offer on could cost you a lot of money before you get accepted (unless you plan on offering asking price).
@Joe Gore Yes, will make offer thru my realtor. Did not think about the title search. Thanks
@Walt Payne The inspection is more of a comfort thing for me since this would be my first deal. I would imagine as I become seasoned I will be able to estimate my rehab and also be able to determine without an inspection whether to make an offer or not.
You should buy REO's without realtors.
I suggest getting a good buyer's agent experienced working with investors to help you make a purchase offer and then navigate the due diligence process. In some cases, it may more make more sense to get your purchase price accepted first and then an inspection. In many cases, you won't have that kind of access to the property until you make an offer. If the house is a HUD REO, an investor offer won't be considered until the owner occupant period to make offers has expired. A buyer's agent can help you with the timing and requirements involved.
The recommendation to buy REOs without agents is not a reality for most investors. You have no way to buy directly from the lender 99% of the time.
You can talk to smaller banks or credit unions and buy direct from them and a lot of people say banks want sell to you, and those people are out of touch in the real world so be careful listening to them.
Yes, I agree with Joe. You can buy REO's from small banks for sure. Do an inspection and if you think you want it, run a title search to see if it has any liens on it. If you still want it, make offer!
I would inspect it myself. A good investment realtor needs to know something about inspecting and rehab, find the right one and they will help you. Then make an offer with a contingency like getting financing. If the offer is accepted but something big turns up in the appraisal or title search, then you can back out on your contingency.
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