Three Important Tips for every REO Buyer… or how to get your offer accepted…

As a bank owned listing agent here in Folsom, Orangevale, and in the greater Sacramento area; I see firsthand which offers are being accepted by Asset Managers.  Even though we have had Bank Owned Assets on our market for some time now, I am sometimes surprised at how naive some agents can be to the process.

Writing a great offer that stands a chance at acceptance is really just a three step process.

1. Write a strong, simple, easy to understand, easy to convey offer that has some hair. If the asset (the House) has only been listed for a short time and seems like it is under priced, it probably is. Don’t waste ink trying to ‘Steal’ it. Do your due diligence, study the comparable sales in the area with your agent, but also look at the competitive listings and check out the homes that are in escrow.  Sometimes they can be the best indication of a local trend…  learn what the market value of the home is and only write if you like the house enough to pay market value. Educating yourself takes time and you might not get a good feel of the market until you have written on several homes. Don’t ask for anything but a pest report on the initial offer. If you have done your work and know the market, you would be wise to come forward with your highest and best offer right away. There will probably be many over-full-price offers… but it’s not always just about price… See number 2 & 3.

2. Get pre-approved;  I mean Be Approved… and make sure you have a well written, short lender letter that says you are approved by a major bank. Make sure your letter has verbiage in it that is easily understood, short and to the point. It should be very clear that there has been a complete and thorough review of documents that are in the file including Paystubbs, Tax Returns, Bank Statements, Verification of Assets and Credit Report, and that the loan is ready to fund. Make sure the letter makes it clear that all you are waiting on is an appraisal and a title report. 

3.  Make sure your agent verifies the offer has been received. (Sometimes listing agents can get hundreds of faxes and emails; things can get lost sometimes, believe it or not).  To make it even more acceptable; have your lender call and email the Listing Agent too.  Even if they have to leave a message on several lines and finally only talk to an assistant, have your lender go to bat for you! Ask the lender to make sure the listing agent has your Approval letter, that it is with your offer and that they have been submitted.  Have the lender tell your story, build up your strengths, portray professionalism and a commitment to close the deal…  and make sure they make it clear that they can be contacted quickly if there are any questions.  The Buyer, Agent and Lender should project that you are a winning team of professionals.  You want to show strength so that the listing agent will steer the Asset Manager towards your offer at every opportunity. But this only works if you do HAVE STRENGTH!

Asset Managers want easy. 

Asset Managers  want fast.

Asset Managers want simplicity.

Asset Managers want strength and professionalism.

Asset managers want deals that close.

Remember, Bank owned homes sell at a discount. They are a steal.  And as such they are not the easiest to purchase.  Even though over 70% of the listings in some Sacramento areas are either short sales or REO’s, there area still conventional ‘equity sales’ out there.  If you have issues that are limiting your strengths as a buyer; such as a limited amount of down pament, etc., you may want to go find a seller who has some equity and would be happy to work with you.

  1. Rob Saxe

    Which came first, the chicken or the egg? Watch your fax today buddy. I’ve got something fer ya!
    Rob

  2. Rob Saxe

    Which came first, the chicken or the egg? Watch your fax today buddy. I’ve got something fer ya!
    Rob

  3. Charlotte exclusive buyer agent

    Great topic. Our market in Raleigh is about 1/3 new construction, so we deal with this quite a bit. It’s amazing the things a builder’s agent will tell, or worse yet, not tell an unrepresented buyer. One other big benefit a buyer’s agent brings to the party is the ability to check the sales history and see if the builder has discounted his price in the past. If so, it is more likely he will do it on the transaction at hand.

  4. Charlotte exclusive buyer agent

    Great topic. Our market in Raleigh is about 1/3 new construction, so we deal with this quite a bit. It’s amazing the things a builder’s agent will tell, or worse yet, not tell an unrepresented buyer. One other big benefit a buyer’s agent brings to the party is the ability to check the sales history and see if the builder has discounted his price in the past. If so, it is more likely he will do it on the transaction at hand.

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