Submitting REO Offers

If anyone could share what types of things to ask for when submitting REO offers would be appreciated.

Thanks.
Lou

We have bought many REO's, & have submitted dozens & dozens of offers. 1st, talking to banks direct - it would have to be small, local banks where you could talk directly to an asset manager or president. The large banks just
list them with local brokers. Even the brokers sometimes have difficulties communicating, because the change asset manager/asset manging companies from property to property.
Banks usually want at least 2K EMD, & in some we had to give 5K with a cash deal for them to accept the offer. They do however accept financing, but you would need your pre-approval & letter of commitment to submit with the offer.
Since they will not let you assign the properties, & you can't do a true double closing, where your are using your buyer's money to close first ... you would need trans-funding or private funding to close the deal & then do a separate closing, with new contracts & closing costs to your buyer.
As for the offer itselt, the amount just depends on location, if there are other offers & if so how many & how much. The banks do not use any rhyme or reason, it almost seems the luck of the draw. The bank had a property that was listed at 39,900; it had no offers for about 1.5 months, so they dropped it to 34,900; we offered 20,000, they flat out rejected it with no counter offer. 3 weeks later it went to auction (REDC) & we won the bid at 20K(plus 2500 buyers premium) & the bank accepted it, they cleared less than if they would have taken our 20k offer through the RE broker. We had another one that
the bank accept our offer, after inspections we found it needed a 6K roof replacement, submitted the estimate to the bank & they refused to come down. We ask for a cancellation of contract, the next day the bank came down $ 2500, we declined & wanted the full 6k, they refused so we got our 2k EMD back yesterday. It took 3 weeks to get it back. Gary/Jill

...Good luck with working with the small local banks to locate some deals on REOs. Attached below is a post that I did a while back on finding REOs. I hope it helps.

http://www.deangraziosi.com/real-estate-forums/buying-foreclosures-reos-...

Persistence should pay off. Sometyimes it is more important to develope a rapport with the REO Assets Manager for future deals that may be in the pipeline. They know what there have available and what may be coming down the road. Good luck and have a great weekend. Believe and Achieve! - Joe

My partner and I are just starting on the DG program. Our attention is drawn to REOs, FSBO and particularly Greg from Mississipi, who makes a lot of deals with tenant buyers.

I plan to learn as much as possible about REOs as a source for deals.

Jim

I am working with the Success Academy and when I started putting in offers for REO's, they told me to add in the Additional Conditions section of the purchase order: Buyer retains the right to assign the rights of this contract to any of her LLC's.

So, you are not signing as "and/or assigns" but it is virtually the same thing. Once an offer is accepted, create an LLC (in Michigan it costs $50) with your buyer. Then, I'm assuming after the close, you would sell the LLC to them to remove your name.

I put in 15 offers this week using this terminology and have not heard back from any that they were questioning or refusing the offer because of it.

Might be worth a try!
Susan

You can follow my progress at: http://www.deangraziosi.com/real-estate-forums/investing-journals/54148/...