Carefully read those bank REO contracts!

Gena, that is great too know.Please keep us informed.
Thanks

Curtis Fillers
(Charlotte,NC)

Gena,

thank you for sharing this information with us; it seems like we need to have everything lined up before we put in an offer, and we definitely need to use our creativity all the time to come up with new exit strategies...
I've been asked to show funds in my account to put in offers for REOs...

The trivia question...
never thought about how long my sharpies last... 25 signs??

Valerie

I dont think Ive seen that heads up addressed on DG sie, but thanks for bringing it to everyones attention. My REO guy is pretty cagey an is also a casual investor so Im gonna let him as well as my other "suite" do most of the digging. I think I would run the situation about the inspection by a "real" lawyer. You know those bank guys put stuff into contracts that are borderline and dont make a lot of sence.

Great post Gena.

Steve that inspection clause is correct they do have the right to correct the problem and move the contract forward.

Sorry Valerie - not even close -
A Sharpie Magnum permanent marker will make (drum roll please) 150 bandit signs before nearly running out of ink. No kidding - now putting them all in the ground - that is the achievement.

An investor of mine wanted to buy an REO SRO I had for $420k and put in an offer $250k. I told him they weren't accepting anything less than $400k.

He sent his purchase agreement in with the the issues to be corrected and expected to get credits on some of the issues. Bank said no, decided to make repairs and then will be raising the price over the previous asking.

Wow, 150 bandit signs...thats awesome. I can't post bandit signs here. Realtors can't even post open house signs here, that how strict this town is.
GOOD LUCK! I hope you get great results with your bandit signs.

Take care,
Michelle

My wife and i are thinking of using the strategy of
Indiana Joe! Contact the banks asset manager, let them know
who we are what we do and then ask for their email for future
further questions as well as a list of their foreclosed properties!

Then review each property and make offers on ones we like but only
through emails to asset manager. The best part is reject letters
are easily read no feelings and coughed up answers to questions
that we might not know or have when talking! The really cool part of this
strategy is low offers with 100% financing also asking two maybe three months
to do repairs before first payment is due, thus giving us time to put
a renter in place or sell the property to another person. This also
gives us time to look for a refi if i decided to combine two strategies
in one using the no seasoning strategy taught by Rena!

This may not work but i know it worked for Indiana Joe why this would
not work anywhere else is beyond me but then again now a days they are
making it difficult! Good luck to all and God Bless!

Not sure if this is exactly the thread but strategy we plan to use!
Any tips please feel free to add.

Also i would have guess 100 or so!

Shawn

The number is 150.
Please keep us all up to date on how you do working with the banks' asset manager. This is an excellent strategy, and I plan on trying it myself in the immediately future. So far, I have only bid on listed REO's. This RE world is changing faster than any of use can keep track - we need each other's input and encouragement.

So, your investor who but in the offer with the issues, was he then bound to the agreement since the bank was making the improvements? Or since they increased the price, was the contract void? I'd be interested in more input from your experience as an agent as to how to work with these bank contracts.
Thanks!
Gena

I read that somewhere in one of Deans books or maybe on here. If there was a way you could review their paperwork upon an accepted offer (before you sign the papers because you're gonna sign papers at some point. Or, have a review period, where you need to "review" it with your attny, before you sign anything further. If they're putting all these restrictions and what not in front of you, they should be willing to bend in the right direction. You could just give them a partial list of something that isn't gonna matter that much.

But, maybe you could see if they will "consider your offer" and give you and answer to that offer, before they proceed with repairs and ruin the deal for you. I can see if it were a legal auction, you would be bound to buying the thing if yours was a winning bid. Use the contingent on financing clause or contingent on your partners approval. Just because you want an "inspection period", doesn't mean you're always going to get an inspection (unless you really want one). Worst case scenario, they keep the em deposit and you get outta the contract. Or, just don't buy a house you yourself wouldn't want to live in. (I heard that from somewhere)

It is always helpful to hear from everyone who is working so hard and making the mistakes, and successes for everyone else ahead of time. I just wanted to say thanks for all the information you all have been sharing.

Richard LaCelle
Bothell, WA

Bank said no, denied his offer without a counter, had us stop showing, got it fixed up and is now selling at market value.

Geez, these banks are really driving me crazy. So they basically used your buyer as a consultant for how to sell the property at top value. Nice. Another new thing I'm running into a lot -just the last couple weeks -is the banks are setting a date, say 2 weeks out from getting an REO and accepting bids until that date, not looking at them as they come in and then reviewing all at once when the date hits. Creates a furry of bids, a little like an auction, and also a bid like HUD holding on until such a date. I've lost 2 houses that way recently.

It's not the best thing for investors who want a 'deal', but.....

great post with some timely information. It just shows that the banks are trying to adapt to what is happening around them, albeit slowly, to capture a higher return. Unfortunately, they are a little late to the party and their tactics will backfire as we go into a double dip with real estate. Large institutions never learn.

We will keep piling their errors on the backs of the shrinking middle class and hope for the best. Oops, my slip is showing. : @ peace,

My question is if no one showes up at courthouse to bid, which commely happens in my area and goes back to lien holder or morgage comp. and becomes REO does the ask price generally go down or up?

If no one bids on the property then the banks turn it over to one of their asset real estate agents. Most times it is for less,and if not you still can offer less. If there is not much interest in the property you can usually get a good deal.

REO's are own by the bank already not sure if the lien holder or morgage comp are the same as a REO. Courthouse bid and REO's apples and oranges were talking about.....
If you really live in a town that no one shows up to place bid on bank on properties please let me know what town you live in and I'll contact some of those small banks for you and show you how in Dean's Your Town Tips chapter 16 Understand and Profit form REOs work! Now is the time to be contacting those small banks in your town. Start with your towns small banks I bet you find one that wants to unload some property.