All Forum Posts by: Shannon Feol

by the way, congratulations on your accepted offer!

VERY TYPICAL as of lately, in my experience. I make tons of offers on REO's each week and it seems that every REO listing that is priced to sell ends up in multiple offers and the price is bid up over list price - sometimes WAY over.

If you bid on a listing that is priced "right" from day one or has just had a price reduction, prepare for multiple offers and your ABSOLUTE highest and best offer.

The seller/bank typically pays the commission for both agents.

Just be sure to ask your agent to make sure they are taken care of.

I have never heard of a bank seller that does not require earnest money when you get a house under contract. Most require something like $500 or $1000 OR they will require 10% of the purchase price for a cash deal.

Here in Memphis, I tend to offer $500 on properties that are less than $30K and $1000 for anything over. However, a lot of bank sellers have a required amount (i.e. $1000 or 10% of purchase price for cash deals) - so ask the seller's rep when making the offer.

I don't know about other parts of the country, but here in Memphis, the "hard money - Refi" model is dead. Lenders will tell you that they can do a 75% loan with 6 month seasoning, etc, etc, but try and find someone that is actually CLOSING these loans.

No worries though, there are all types of creative financing options. If you have a self directed IRA you can invest with it or if you have a friend or relative with one they may be willing to create a mortgage for you. Even if you paid them 7% interest that will be alot better than the 2% they are making in their 401K or better than the money they are losing in it recently.

We have built a program here in Memphis that combines investing with cash or a self-directed retirement account AND a non-qualifying loan and structures it so that you aggressively pay down the principal over 5 years so that you can own your rental properties in the clear in ONE SIXTH of the time of a 30 year mortgage and pay tens of thousands less interest. Plus purchasing with funds from different sources gives you the option to buy MORE homes and pay them off in LESS time.

Try and find someone who knows a lot about creative financing. I agree, owner financing is good, too, and you'll be surprised how many sellers are open to the idea. You'll see there are lots of options.

To answer your question, the offer acceptance is usually good for 48 hours by which time you need to have signed documents and earnest money to the seller's agent. But if they accept your offer, you made a good faith offer and shouldn't back out at that point! If you need to do due diligence, do it AFTER the earnest money is down.

I'd suggest always asking for 30 days to close when making offers on REOs. Some banks only allow 10-14 days on cash deals, but always try. That way you'll have plenty of time to secure an end buyer.

If you are in a multiple offer situation, you can always change the terms and close quicker to make your offer more appealing.

Just don't be the guy who "always" backs out of contracts. Your reputation is important and assest managers/REO listing agents will remember who you are and won't take your offers seriously.

We've got great cash flow in the Memphis area - very low price points, large rental pool, generally stable rent amounts.

I hear that many cities in the Southeast US are similar.

Brian, great point. Of course - I always recommend using a buyer's agent to represent you and help you understand the paperwork and negotiate. But, if you're dead set on not using your own Realtor, my suggestions are in the above comment!

The seller pays the buyer's agent commission anyway, so it won't cost you anything to retain one!