Can You Get Inside To Access An REO Before Making Offer To Lender?
Since, I am very new to this, please excuse the question. I was wondering if it is possible to get inside a property that is in REO before you make an offer to the bank. I would assume that after going through LIS and NFS that probably the occupants have been asked to leave.
Also, does anyone have any experience in finding the insides of REOs damaged beyond the repair worth?
Thanks for all your feedback.
yeah, call a realtor or call the number on the realtor sign in front of the property. REO's are ususally listed and no property is beyond repair.
Yes, you can get in to see REO's. Don't take too long, if the deal is good it won't be around very long. If your realtor wants to make an appointment a couple days out, you may have already lost the deal.
If you can't get in, that is OK as well, just assume the worst and offer low. If they don't make it easy for you to get in, then let them know that with your low offer. That's what I do.
If you are dealing in really low end areas, it is possible to find homes where the repairs are higher then what the finished home is worth. But if you are dealing in decent areas, this usually isn't the case.
I'm in the process of doing a home right now that will cost about $100k to renovate. The home is worth about $180k fixed up. Because of the extensive repairs I bought it for $23k, so I'll still have room for a decent profit.
[addsig]
I think mfwalton is perhaps asking about properties that are not yet listed or scheduled to go to the sherriffs sale. In those cases it's difficult to get in. I'd like to know also if anyone has had experience getting into a house that is scheduled to go to sherriffs sale but is not on the market. The bank doesn't own it yet either. Would you contact the lawyer for the plantiff in this case. Who has the key?
These properties that I am interested in are REO. However, they have not been turned over to a realtor for MLS listing for sale. Since the lender does not know if the occupants are out, they will not let us go to the door. I partially understand that but I don't understand why they have not removed the occupants since there is no redemption period in the state of Florida.
I don't understand why the occupants would be there either. I only know about Wisconsin. Around here the owner of the prperty is gone before the sherriff sale, often months before. I don't know about you but I'm a bit nosey. When I see that something is in forclosure process, even before the sale, I will go over there and investigate. I walk around, kind of peek in the windows etc. I usually figure out if it's empty by newspapers lying on the porch or junk mail overflowing from the mailbox. I also might call the assessors office and ask the name of the former property owner. If it hasn't gone to sheriffs sale yet, I may call them up myself. Anyway, There are ways of finding things out. It seems weird that the bank doesn't seem to want to help you out. I mean why would they not want to have an easy sale and bypass paying out a commission to a Realtor?
the second i run numbers from the foreclosure list, i take the ones i see profit in and drive right to them. i usually see them in there with only 1 light on in back of the house, "hiding out"! i don't understand this, b/c it's still their house. but yeah, i knock and they usually won't answer, but i leave my note/letter in the crack of the door and go back to my truck, noisily and slowly, and warm it up long before i pull off, hoping they come let me in! <---- never works tho!
I have had contractors inside an REO to get estimates before making an offer. On the other hand, my offers are subject to inspections and with REOs there is more likely to be damage. If you find unexpected damage you can document why the price should be lower than your original offer and renegotiate.
MfWalton
Most REO's have resident Broker representation. Them that don't are transitory in their jobs and it is not necessary to know their names.
I ask for a key for interior inspection. Most of the properties we have been observing all the way and would have intruded if there was a value.
A few instances have occured in which the REO was super neglegent.
An Example:
Gibralter Savings and Loan, Their REO emulated the companies name, he had a head like a Rock. Incapable and an abomination to all Brokers and Investors.
In any case we examined the interior of the dwelling located way out on the Eastern Fringes of the County. What we found was truly amazing. The entire electrical system had been removed, I mean conduit, Breaker boxes, the works. As if that were not enough, the plumbing fixtures had also all been removed and the 4" waste lines filled with many beer cans, filed with cement and then pushed along the pipe toward the sewer. The walls interior had been smashed in with a sledge hammer and that done in a random manner so that no descernable pattern of violence could be established.
All of this we explained to the Highly Challenged REO Mr. Smith, who merely smiled coyly intimating that we were only trying to reduce his asking price which at that time duplicated the price of a Bel Air Mansion previously inhabited by a Movie Star.
It was about five days after sale that the Granite headed Mr. Smith REO, called the office and suggested that if we would come to his office he would break away from him many duties and talk to us about a small reduction in price of the PIQ (Property In Question).
We went, it was on this visit that I first was informed what PIQ really meant. Our reading of it was Property Interior Quaked!
He failed to see the humor and offered us the property at a price similar to Louie B. Mayers Mansion in Beverly Hills. We countered with an offer based on land value only minus the cost of removal of the inhabitat. This went on for several days. He finaly met our price and really qveetched when we asked that his institution make us a construction loan to rehabilitate the house.
The long and short, nobody else would play and we finaly got the property with a construction loan which their in house escrow screwed up. Instead of holding funds and dispursing during the period of construction they just cut a check for the entire amount and handed it to me, plus my full 6% commission on closing. Yips!
It was shortly thereafter that Mr. Smith was terminated from his duties as an REO Officer Don't have a clue why.
Quizzekly Lucius
My recent REO purchase, (and it was my first), I actually had it inspected before I put my offer in. My agent arranged it with the listing agent and I used my usual inspector, who is also an investor.
Having the inspecting in hand, allowed me to document my low-ball offer. It worked and they accepted my offer.
Another option I've used is to have an inspection kick-out clause which gives me 10 days to have the inspection done allows me to walk away if I discover the property to be too much for me to handle.
Thanks!