HI all, and thanks for the help ahead of time! I was driving for dollars the other day when a house really caught my eye. Turned out to be an reo, sign right on the line. I would really like to give the realtor a call and give the house a look but I haven't looked at an REO yet, only private sales. This REO got me thinking a bit so I did some research on BiggerPockets about REO's and feel that although banks are tough to negotiate with if you approach it the right way you have basically the same shot you do with a private sale. Also I feel that I have much more confidence and firm negotiating stance going against a bank compared sweet ol betty going to the nursing home. So I have a few questions before I really give it a shot!
Here is the process I planned out based on what I've read.
I was planning on calling the individual listing agent per house to schedule and appointment.
I am a general contractor and rehabber so I was planning on going to these houses and just looking them up down and sideways to insure that I feel safe without an inspection contingency.
IF interested in the house submit an offer for cash, no contingencies, and offer to close within a 7-10 days.
1. Do I have to meet the realtor there or will they give me the lockbox code?
2. Am I under any obligation to make an offer after looking the house over?
3. How long do you normally have to submit an offer? I know it'd be great to just know it off the top of your head but, I'm a numbers guy I'd rather take the time to run my numbers...
3. If using a private investor for funds, I assume I will have to have the investor show proof of funds? Or do I need the money in my name to submit these offers?
4. I feel that some of these reo's are listed at some rather ridiculous prices all things considered.. Am I wasting my time offering that much below list price? Are these list prices ever paid?
@Greg Behan Some Realtors will give out codes, but they are risking a lot by doing that. You are under no obligation to make an offer at any time, and have no deadline other than the possibility that someone else will get the deal. Lowball offers will work under some circumstances. For example I see a lot of REOs listed as if they are first time listings now, but if you watch you will notice they have been on the market previously and the deal fell through. Those old listings will potentially be ripe for any offer of any kind. What is the worst they will do? Say no? Ouch, that really hurts! Don't offer stupid low, as in trying to make a steal. But if it will take a low number to make it work, offer what you can work with minus a bit of negotiating room.
Yeah there's always a little wiggle room but nothing crazy.. I have noticed a few of them have been on and off the market... I wouldn't say I'm offering crazy low... Just my ideal number and if I can make the counter offer work or something in between that great.
1. If you know the agent and have a good working relationship you might get a code. In all likelihood the agent won't even talk to you. Instead they will direct you to a buyers agent. So, you might as well find one and let them schedule the showings.
2. Certainly not.
3. As long as you want. But if its a deal you need to be quick or you will lose out.
3. A cash offer means YOU have the cash. "Proof of funds" is a bank statement with the same name as on the offer. Anything else is a financed offer. So, submit a financed offer with an approval letter.
4. Base your offer on a price that works for you. If its low vs. the asking price it probably won't go anywhere, but it doesn't hurt to offer. REO sellers will drop prices periodically. If your offer is rejected (or, more likely, ignored), resubmit it every time the price drops. Here's where a buyers agent can help by watching for the price drops.
Are you actually planning on buying? Or wholesaling? Because if you're wholesaling there are another set of roadblocks to overcome. REO seller addendums you won't be able to change, no assignments, and sometimes restrictions on re-transfer of the property.
it would be for a rehab
@Greg Behan - PM me the agent / brokerage and I will tell you if I have had success getting the lockbox code from them ...
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