Should I put an inspection period on an REO

Yes , 14 days

Curtis Fillers
(Charlotte,NC)

Thanks Curtis. I've been reading that the offer has a better chance of getting accepted by the bank if there is no inspection period put in. Have you had that problem?

Hi Curtis. What is your opnion on the numbers. Do you think they work?

When making offers on REO's and Shortsales at least here in Florida. the banks most of the time counter offer with 5 days for inspection period. You are lucky if you get more than 5 days. But it doens't hurt to ask for more you may get lucky and get the 14 days inspection period.

Just keep in mind if someone else offers $43,600 with no ispection period they will probably have a better chance...

Juan D Cruz

Thanks for your response Juan. It was my understamding that when the banks come back with their docs they do allow a certain amount of time for inspection.

What do you think about the numbers? This is my 1st REO offer and I am a little nervous.

Jo Ann

15 days inspection. What a realtor told me was that a lot of times, the bank has no kind of history on the owners of homes, so that is why they would be so quick to accept an offer with no inspection contingency.
A story she told me about one home. A bank had repossessed a home and found out that before leaving, the owner had ripped out all of the copper pipe and electrical wiring to sell. So you definitely want an inspection contingency in your offer.
Good luck!

RENinja

try and get inside and get your estimates done beforehand so when you officially present your offer, you're ahead of the game and can lessen your time.

Little tidbit for investors; whenever you can get copies of keys made, do so.

If you can get your hands on a lock on a property and you have access to the keys, copy them; speeds up time if you need to show someone to flip it to

Hope it helps

Not only is it the only "legit" escape clause most banks will accept, but
it gives you time to find your buyer if you are going to wholesale the property. While doing the inspection it will give a more exact budget for repairs to pass onto the buyer also; & in some cases if you find an extra expensive idem that needs repair or replacing, you can go back to the bank & renegotiate the price. We just did it with a roof on a Fannie Mae property because it was going to cost $ 7500 & we budgeted $ 5000. The bank came back & offered us an additional $ 3000 credit toward the roof replacement.

I don't know what the market is like where you are but here in Denver that offer would be too low to be considered. Don't know who the lender is on your deal either.

Providing your ARV and Rehab costs are indeed accurate (how did you come up with these numbers?)Here is what your maximum offer would be if you wanted any chance of it being considered.

ARV $115,000
Rehab $15,000
65% of ARV minus repairs = $59,750 offer price.

Flip it to your buyer for 70% of ARV minus repairs = $65,500 sell price.

These numbers are not cut in stone but a very good guideline for making realistic offers that a bank may consider.

Michael Mangham
MD Home Acquisitions LLC

The fewer contingencies on your offer, the stronger it will be to the bank.

From the previous comments, it seems the guidelines vary by state. I recently got an offer accepted on an REO ("amognst other 70 offers") so I was pretty excited to close the deal. However, the "acceptance" had an addemdum somewhat treacky to understand and my 7 day inspection was cut to 3, well, when I tried canceling on the 5th day I got the heart sinking news that if I did so, my $4k deposit would b gone. Luckily, my broker found another escape clause, but its been 8 days since the cancelation and the seller has yet to sign the release of funds on my deposit. So, as someone mentioned already, do your due dilegence bfr. summitting ur offer, so u r acting on pure preassure or emotions during ur inspection period (however long or short this might be).

a bigtime investor told me he has the best relationship with the top reo guy in the steate he said they call him 3-4 times aweek with deals one reason is after looks and inspects the property drops off all the paperwork to him and waves his inspection because he allready did it and knows what he wants to pay witch shows youve ben around a while and did your homework.

Thank you to everyone for your input and help to get me through my first offer. I will definitely put an inspection period in the offer and am rethinking the offer amount. I will make the offer today.

Thanks so much!! I hope to be informing everyone of my first deal soon!

Keep Positive And Keep Going!! Don't Give Up On Your Dreams!!