How To Buy REO (property That Have Gone Back To Bank After The Sheriff Sale?)
At first I just wanted to say how great this forum is!! It is one of the best forums if not the best forum online. The answers and advices usually are very professional and real. That's why I decided to post my problem/concern hoping that I would get some advice from smarter and more experienced investors.
I do almost everything : buy preforeclosure, bid at the sheriff sale, rent, lease and flip, itc. I usually buy 15-18 properties/year.
Here is my problem:
I have tried so many times to buy REO ( property that was awarded to the plaintiff/bank because there was no successful outside bidder at the auction) at the discounted price and I always was unsuccessfull. I have tried to deal with the attorney of ther plaintiff and/or directly with the bank. They even did not give me a chance to present them my offer. I have no idea how I should approach them so they would reconsider my offer. I know that some investors have been "lucky" buying those properties at the deep discount but they do not want to share their secret recipe with me.
Does anybody buy properties that go back to the bank after sheriff sale? Are there banks more easy then others? Which ones? And finally what should I do so they will take my offer or at least give me a chance to present them my offer?
Any advice/comments would be great!
Anna
Find out who the realtor is that deals with that banks REO's. I have a realtor here that deals with all of Fannie Maes and she calls me before anything hits the MLS
Joe
REO's are almost always listed by real estate agents. I think the best thing to do is to get an experienced agent (buyer's) to get the list of properties. It is very tough to deal with REO without experienced agent. First time we bought a REO, we had an agent who had been dealing with REO's for years. Eventhough Bank of One was not so nice to deal with, our agent made it easier. Unfortunately, he moved to another state, so we had to get somebody else.
Second time, we got a very unexperienced agent. Everything went wrong. We still bought the prop reluctantly after the whole experience.
Third time, we got another very unexperienced agent. We felt kind of obligated to use his service, since we personally knew him. We lost our contract because he made a mistake putting together the contract. $1000 earnet money we gave him is still in his broker's accont. I hope we can still buy the property.
Don't make the same mistakes that we made. Call around and find an agent that you can trust.
Just a thought from an ex banker....
When the bank bids at the auction, he is bidding the minimum amount possible to purchase the property but never more than he is willing to accept on that day.
Chances are that you are offering too little to interest the bank in talking about your offer. After he owns the property, costs go up with transfer taxes and more carrying costs and broker fees. Is it possible that you didn't take into consideration the banks costs (attorney fees, interest accrual, inspection fees, real estate taxes, etc)?
At this point, the banker is pretty much out of it (depending on the size of the bank). His policy is probably to turn it over to the realtor handling REO's and let them worry about it.
In my opinion, it's best to outbid the bank at auction (up to your own pre-determined break point).
Jim
[addsig]
Asak400 cannot contact the bank to even make an offer, wer'e not talking about a high/low offer. I know Wells Fargo is difficult. They direct you to a useless website and won't come within 100ft of any kind of questions about particular property. Any RE agent selling REO in my area is selling remodels for FMV and that's useless. Just frustrated, but hope to here more info on original query..........Gee
And finally what should I do so they will take my offer or at least give me a chance to present them my offer?
1rst find the www.agent.Then do some research to find out what the amount was due on the loan when the bank forclosed on www.it.That will give you a good number to work with.Because the bank will try to get top resale value even if its not worth www.it.Then do a walk threw(after you find the listing agent)take a camera and take a lot of pics of all the bad things you can find no matter how small ,hell even make some www.up.Then use your computer to make a report/home inspection/offer report use the photos and write beside them what it will cost to fix it up ,to bring it upto the max retail selling www.cost.Then on your bid report put in all the figures with a letter to the bank to let them know your an investor and this is your www.offer.Offer a little less than what the home was forclosed www.on.I did that and got the bank to drop there price from 109,00 to 74,500.
nice