What is a REO?
A REO is a property that the lender or bank acquired through foreclosure. It stands for Real Estate Owned (“REO”).
Is the price listed firm, or can I make a lower offer?
All offers are reviewed by the bank, as they are the current owner of the property. It is also worth noting that making a low offer can hurt your chances at receiving a counter offer.
Will the bank give counter offers?
You will likely get a counter offer, but the banks asset manger must have a serious offer to give a serious counter.
If the property needs rehab, will the bank accept less and take this into consideration?
The lender is usually aware of the property’s condition and has had an agent or representative visit the property and provide a report. The condition of the property is usually taken into consideration when the list price isestablished. The lender will consider offers, but don’t expect them to knock off thousands for repairs, unless the property has been sitting on the market for an extended period of time.
Will the lender make repairs?
It is very unlikely that any repairs will be made. When the property is listed, it is offered in ‘As-Is’ condition.
Do all REO’s need work?
No, some properties are in move in condition, but most need cosmetic work performed.
How long will it take for the bank to respond to my offer?
One to three business days is common. Sometimes a response is given within the same day.
My offer was in first. Won’t it be accepted or countered before any other offer is accepted
No, the order the offers are received does not matter. All offers are considered at the same time and the bank usually sends out multiple counters offers. Sometimes, even an offer is acceptable, the asset manger will counter all offers for “The Highest and Best Offer” in order to see if they can get more.
Isn’t the highest offer always accepted?
Absolutely not. There is much more to an offer than the sales price. It is very important to have an agent that knows how to prepare a professionally written offer. Incomplete offers are not even considered. Buyers often focus on price, but there are many other factors for the seller to consider. Financing is very important. Has the buyer been pre-qualified? What kind of loan? Is the closing date too soon, or is it too far away? What other terms are in the contract? Etc.
Does the property have a clear and good title?
Once in escrow, the property will be sold in the same fashion as a standard sale and the buyer will have a chance to review title and secure title insurance to make sure there are no issues.
Who pays the back real estate taxes?
The seller up to the day of closing pays all real estate taxes. The buyer is responsible for all real estate taxes from the day of closing forward.
Can I have a Home Inspection?
It is your choice to have one, but it is highly recommended for any real estate purchase.
Will the bank pay for a termite inspection, septic inspection and well water test?
It is not normal and banks often require the buyer to handle all inspections and reports. It is highly recommended that you at least have a buyer have these inspections done. If you are financing the purchase, almost all loans will require a termite inspection.