Offer on REO

[Keesha Smith]

I recently made an offer on a REO. How long does it take for them to respond? If it can take weeks to get a response, how can a wholesaler get steady income from REO's? During the time that I'm waiting for the counter, rejection or acceptance, can I make other offers on other REO's?

Thanks for any and all information!

[Jon Holdman]

Usually only a matter of days or a week or so. I have heard back weeks later, though, usually when other offers have fallen through.

When I was trying to buy REOs I would make several offers a weekend. I work full time and buy for rentals, so I would look at 10-12 houses on a weekend and write 3-4 offers. I put "EM to be delivered by certified funds with 48 hours of contact acceptance." I put a five day acceptance deadline in the offer. If I don't hear back by that time, I'm not obligated to buy. But if I do hear back later, I can buy if I want. Typically takes 10-20 offers to get one accepted.

REOs are tough to wholesale. For one thing, they're right on the MLS so every can see them and make offers. Cash buyers have the strongest offers. You're going to be making financed offers using some pre-approval letter. You only have a short time to do inspections, typically 10 calendar days. That's the easiest way to escape if you don't have a buyer. But you have to be quick. Lenders will rarely accept a low-ball offer. Usually only if the property has been available for months and months. They won't let you do assignments, so you'll have to do double closes. These days that means transactional lenders to fund your purchase. And some sellers will put in deed restrictions that limit your ability to re-sell the house for some period of time.

Better to get out there and beat the bush for private sellers.