REO Contracts

[Major Jones]

My REO agent asked me about the terms that I'd like to include in the contract for her to write up. When submitting offers on REOs, or any active property on the MLS, is it a good idea to include an inspection as one of the terms? Is AS-IS better? How many days to close? What are some terms that will protect me yet solidify a great appealing contract? I am in the San Francisco Bay area. Thanks!

[Joe Villeneuve]

Keep in mind if you make an offer with all cash, you lose the "exit contingency" of not being able to get financing...as in your lender won't finance the deal. What this means in the short run is you will lose your EMD money.

Also, keep in mind some banks have standard terms they work with.  No matter what you put in your offer, they will come back with their standard terms.  So, we just work with those from the beginning.

Here is our standard offer for REO deals:

7 day inspection period

30 days to close.

Financing.

$1000 EMD.

If we offer anything else, even if it is in the best interest of the bank (like 10 days to close), they change it to what's above.

Now, every area of the country is different, and every bank is a little different, but in Michigan I find they are all "having lunch together".