Tips 1 to 3 On Writing REO Foreclosure Offers

Published by cravat | Filed under Buyer / Seller Tips, Miscellaneous, Real Estate, Shout Outs, Uncategorized

A lot of home buyers want to hit the jackpot and purchase that REO foreclosure, many of which are usually under-priced. When banks value REO foreclosure under the comparative sales multiple offers are often the response. It only means you could be up against a very tight competition for the bank-owned home. 

If you are thinking how you can make your REO offer stand out above all the rest and be the winning offer, here are some tips to help you choose the right price and terms: 

Get the History of that REO Foreclosure Property 

Try to ask your buyer’s agent to find out the bank’s value price on the Deed. Usually, it is noted on the document which you can get from the tax rolls or a title company. Make sure that compare notes to the price the bank is asking. Check the amount of loans that once secured to the property. Somewhere between the amount of the original balance and the foreclosure sale price is the amount that the bank will allow, if the property is under priced. 

Know Comparable Sales for the REO Foreclosure 

In so many cases, the listed price has a small bearing on the value of the property. The market value carries the most weight. If you are up to competing, other buyers will definitely offer more than the listed price. Check the last three months of comparable sales, for that area to know how much this REO foreclosure is worth. Use only those homes that closely match the REO on per square footage, number of bedrooms, baths, amenities and condition. Ask your Agents to call the listing agents for pending sales and learn more of the offer prices. Others will share information and some will not.  Look at the active listings. Most likely other buyers will use to offer a figure because they are the only properties those buyers actually tour. 

Examine Listing Agent’s REO Solds 

Most REO agents typically work for one or more banks. Other listing agents are exclusive listing agents for REOs and they no longer list any other type of property. REO agents deals business in volume, they usually apply the same pricing standards to all their REO listings. 

Ask your buyer’s agent to find the listing agents in MLS.Find that listing agent’s name to find the latest agent’s listing usually around three to six months.Review the history of those listings to know the list price to sales price ratio. If most of those listings are selling for say 5% over list price, then you may need to offer 6% over list price and vice versa. 

If you offer over list price, bear in mind that the appraisal will need to substantiate that price. If you find yourself dealing with a low appraisal, you have options, so do not despair.