OfflineOK...for whatever reason, I have held-off getting started in a career with real estate. I joined this site over a year ago, but never put any work in.
However, with a lot of things in my life piling up, it's time to thrust my fear of success aside, swallow my pride, and ask for some help.
I have located an REO property which is listed 12% below market value. I am confident that I can purchase the property for up to 50% off of market value.
After studying Dean's books some more, watching several videos on the Total View Real Estate Website, I finally got the courage to submit an email offer like Joe Jurek did, to the agent who handles the REO property.
I received an email message back within a few hours stating that my offer was unacceptable, and that I needed to submit a written offer, with pre-approval letter, and earnest money deposit.
I emailed the agent back asking for a contact person at the bank so that I could contact them directly, and she would not give that information to me.
I felt 'snubbed'. I waited a couple of days and emailed the agent back, stating that I thought that all offers were supposed to be submitted according to the NAR Code of Ethics. I haven't heard back from her yet, but I have a few questions:
1) Should I just move on to another deal, or should I pursue this one since it fits all of my criteria, and is such a great deal?
2) Should I ask for the bank info once again so that I can speak with them directly?
3) What obligation does the agent have when dealing with me and submitting my offer? Should I expect that agent to submit my offer regardless of what it states?
4) Am I shooting for 'too much' expecting the bank to finance the property for me, and doing a 'no money down' deal?
5) What are my next steps?
I want to succeed, and change my life, but it seems like I am being 'shot down' before getting out of the gate.
Thanks in advance for any and all help!
Todd
Hi Todd:
thank you for your post. Lots of people here happy to help you out.
As someone who sold strictly REOs for the banks, here are my thoughts:
1. Each bank has an asset manager who assigns each property to a specific realtor. You have to make nice with that listing agent. You asking to speak directly to the asset manager isn’t going to happen. They are shielded by the listing agents.
2. Not all offers are submitted even though agents are supposed to submit all offers, particularly when they either know or have a ball park idea of the minimum the asset manager will accept. Not fair, but life's not fair, so buck up a little.
3. In some states and/or for some banks, the listing agent for the bank CAN NOT be a dual agent (like Florida, I've found), so your offer must be submitted through your own agent (no fretting - there are lots of good realtors out there), and almost always you have to put down minimum $1,000 good faith deposit just to have your offer entertained.
4. REOs being sold by the banks have to have proof of funds submitted along with your offer and $1k. Proof of funds or POF could be a letter from your bank manager saying you have a minimum of $x dollars in the bank, a copy of your bank statement, or a POF letter from a hard money lender or private money lender with the specific address typed on your letter. Dean doesn't like us to recommend specific outside vendors, but if you read the threads you will find out where to get these POF letters.
5. Also, as far as funding your REO, the bank ain’t gonna do that most of the time, so don’t think they will. All you have to do is align yourself with some private money investors right here on Dean’s site. However, to get private money lenders or hard money lenders (who often charge 11-13%), you have to have an exit strategy. Say you want to buy, rehab and flip a house. You have to know how much it’s going to cost to rehab, how long that will take, how much it will appraise for after repairs (after repairs value), how much meat is on the bone after you pay your lender, and be prepared to professionally market (have a r.e. agent put your house on the MLS so people can find it).
6. Not sure if there’s enough meat on the bone for the offer you thought you were snubbed on. You weren’t really snubbed – you just weren’t prepared, and that agent didn’t want to take time to school you on what you need to do to get your offer accepted. That’s not his job, so don’t feel bad or snubbed – waste of time.
7. Most importantly before you buy, you must know your market. Is unemployment really high like Vegas, Detroit, Los Angeles, etc? You want to find nice homes in places with a stable economy, great employers, and low crime rates.
8. Send me a private message and the area you’re interested in.
Don't worry - lots of people here have trouble getting off the couch and getting their first deals done. Don't fret - we all started out as babies! Good luck!
Very informative reply. I certainly learned a lot.
Thanks,
Oran