Presenting Offers on REOs - Property Listing Agent vs. Buyer's Agent

For the deal I'm working on with an REO, I'm looking to do an assignment. So that means I'm going to need some special terms written into my purchase contract. I spoke to an agent yesterday and strongly advised me against using anything other than the CAR contract if I didn't have a real estate attorney write me one.

He said that the bank probably wouldn't take my offer seriously if I didn't use the CAR contract.

Any thoughts or experience with this?

You may look into this land trust thread if you are look to "assign" the reo.

http://www.deangraziosi.com/real-estate-forums/buying-foreclosures-reos-...

i will probably do my first deal with a partner... do you have a contract
such as this or do you know where i can find one?

how would we word/and or use in the contract for these contingencies? are they already in the DG's forms?
much appreciate any insight...thx a bunch evry1...
and doing an REO, does the banks need a certificate of monies? or just go in there and drop an offer or two and see what happens?
thx, Joe

Hey CYA could mean Cover Your ASSetts

Working on my first deal. Found a real "fixer" in San Diego listed for $599,000 (drive-by appraisal). Recently sold comps in this nice neighborhood are 550,000 to 800,000.
I went to see the property with the listing agent. It is a probate sale, realtor said make any offer, it will be considered.
I took my dad (retired general building contractor) over who estimates repairs at $50,000.
Listing realtor also gave me a copy of the home inspection and termite report.

I want to offer $265,000 and borrow $365,000 from a hard money lender. Fix and sell within 60 days.

Does this seem do-able? Am I missing anything here?
Thanks, Angela

I forgot to mention that I will ask the selling agent to represent me as a buyer and take the commission. THis should give him more incentive to sell to me right?

Thanks, Angela

Since banks do not allow assignment on REO properties, is there any way to get around this situation to assign a deal? This is in California.

Please help!

Yes you should get estimates from contractors or subcontractors for free. I like to use someone that can do the work themselves - many talents.

I am under contract with a bank on a REO. The closing should be some time this week. I met with three guys last week - in the house.

One was an A/C contractor. The other two were guys that are subcontractors but can do everything I need to have repaired (taking down a wall, closing in two doorways, widening a doorway, building a new A/C closet and matching the plaster). All I will have to do is paint and have carpet installed.

Both these guys gave me an estimate - labor per day and how many days they estimate it will take.

Contact your County Clerk's office. Most are available online. You will have to know the address of the property and the owner's name (the one that lost it to foreclosure).

In my county I can view the actual mortgage online. Say it is Citi Mortgage. You can go online to Citi Mortgage and view their REOs. If the one you are interested in doesn't show (yet) at least you can get the name of the realtors they list their properties with and contact the realtor. He should be able to tell you what stage it is at. It usually takes a couple of months once they have aquired a property through foreclosure before they can list it for sale.

Thanks for the tips and information. The more data and research we can gather on an REO, the morei nformation we can use to make a great offer. Good luck with real estate investing. Believe and Achieve! - Joe

Thought I'd put this out there.
I have made offers on a # of properties that did not come through with my buyer's agent. The agreement I signed ended 7/31/09. One property I had already made one offer on went to foreclosure and is now relisted by another agent for the state. Met and toured the property today with the new listing agent asked what was expected if I offered now, do I bring on my former buyer's agent? I reread the agreement and discovered that there is a 1 year extension in the agreement that if the agent submits an offer while under the agreement, and the original offer is expired and then the property is re offered upon by the buyer, the Buyer's agent is still part of the deal.
Whew! that was a lot of learning for one day, besides all the wonderful topics I'm reading on the forums.

I'm a newbie that has read the books, have put in afew offers and rejected.
Just submitted one today on a REO owned by the state. Pointed out to listing agent all the things that need to be done.

Will let you know...
Waiting actively to close the first deal.

Thanks for sharing your experience and information with us. As you have indicated you have been learnign a lot along the way and that knowledge will begin to payoff as fuutre deals present themselves. Keep yup the good work and that first deal is right around the corner. Good luck on all your future deals. Believe and Achieve! - Joe

I am reading Dean's book "Profit from.....". I have reread parts to understand. I have also been on this site, trying to get familiar and comfortable with it. I have read several comments...they are a big help. My own house is in foreclosure right now. But I don't intend to loose it, I worked too hard to get it. I am a single mom, out of work after 20 yrs. after an on the job injury, only one in 20 yrs, and I was terminated. Alot of things have changed in my life, and it took me awhile to get to this point to take back my life, and when I was ready, Dean and this group were here with a lifeline. So I am looking forward to being involved with this group, getting advice, being successful and paying it forward. Thanks for taking the time to read this.

I have found 2 contractors who are willing to give estimates for free. They need the work and hope it will lead to doing more business down the road. Both are aware that I am just beginning. Maybe just by talking to friends you might know somebody who knows somebody that would help you out.

Best of luck on your search!

Congratulations for being part of the DG website community and good luck with your current situation. A positve attitude and outlook can make the difference. Good luck with your situation and future investing. Believe and Achieve! - Joe

Thanks for the insight and the comments. It does help to get more than one estmate and the bids are competitive because there are not as many jobs available for contractors at least in our area of the Midwest. Believe and Achieve! :)- Joe

If you haven't tried it yet, try the Total View website. That will help you especially if you know the address. Hope this will help you...good luck

Hello all! I'm a Newbie. I've read the book and have general RE/mortgage background. I do have some questions though, that I haven't located or missed in the forum.

1) is there a technique/option to apply when a property is 'Upside-Down' (loan is higher than the current value)? Would that lead to a 'Short-Sale' as the only option, and if so, could I be apart of it somehow?

2) Per REO's is it possible to 'assign' with a bank/agent with the buyer?

3) Buying my own property to live in with $0 down? Are there other options than the following?
- Owner financing
- Hard money financing

thanks in advance for any help you can offer

I recently submitted a Letter Of Intent to a listing agent on what appeared to be an REO and he responded back that "his" client will not consider anything less than the listing price, so therefore he was not going to submit my Letter Of Intent with my Pof's to them. So I sent him another e-mail and told him that by law he's required to submit my offer to the bank and that if he didn't, not only was he going to possibly lose his license as an agent, but that I was also going to cut him out of the picture all together and go around him,(lol). Well that got the lead outta his @55 and made him reveal why he hadn't wanted to submit it to them in the first place(my low offer wouldn't have gotten him hardly any commission). Play hardball with them and see who budges first!

Hello all.

I am definitely a newbie, but very motivated to get into Real Estate investing. I have browsed through some of the comments from the DG fam and they are helpful, so I said why not, join.
Anyway, I am looking at properties and there is one potential in my neighborhood (NY). I know a few people have mentioned that it is good to do research and gather data before talking to the listing agent. That is where my questions come in. How and where do I start to gather data and research?

The home is really old and probably best to demolish the home and put up another. The report states that the property is HomePath Renovation Mortgage Financing approved. Would the demolition of the home fall under that if I got it?
Could the fact that the home is not salvagable be means to offer a lower price?
I am taking this slow, but it seems like a great deal. This home has been on the market for at least a year.

Thanks for any assistance.

Kim

Hello does anyone have a templet of what to say when I send a letter to the owner of a property, that I would like to know if they want to sell it or not...

Thanks for the comments and the reminder tip of Totalview. Good luck on all your deals. Believe and Achieve! - Joe

Congratulations and welcome to the DG website. In regards to your questions:

1. Yes, this will usually lead to a short sale if the bank is willing to accept the reduced amount. This can sometimes take a while for a bank to approve. Just make sure yu know a goodidea of the current value based on recent comps because some short sales are still higher than the current market value fo the home.

2. Most banks usually do not like REOs to be assigned. When presenting an offer to a bank you could include your name and/or assignee and see if they accept it. In my area miost banks will not accept it.

3. Try to contact small local banks that have REOs in their inventory. See if they would be open to finance the home 100% no money down for you. Soemtime all it takes is buiding a relationship and asking the question.

I hope this helps. Good luck with real estate investign and locating a deal for a new home. Believe and Achieve! - Joe

Thanks for the comments and sharing your story. With investing we have to be polite but persistent. Sometimes it takes follow-up and a little more work on our part, but if the deal goes throug hit can be well worth the additional time and effort. Good luck on your future deals! Believe and Achieve! - Joe

Welcome to the DG website community. It is true that you want to gather information on your target area that you are considering investing. Per the Fanniemae website: "The HomePath Renovation Mortgage Financing is special financing available on Fannie Mae homes with the following HomePath Renovation Mortgage Financing logo:

Available only on homes you make your primary residence and offers these benefits:

•Financing to fund both your purchase and light renovation
•Low down payment and flexible mortgage terms (fixed-rate or adjustable-rate)
•Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit, state or local government, or employer
•No mortgage insurance*
•HomePath Renovation Mortgage financing is available from several lenders."

Thus, you would probably not be able to demolish the property and would be requried to rehab it. I would suggest if possible to try to locate a home that does not need as much work. Sometimes a rehab can cost 2 to 3 times more than you anticipate. The ket here is try to get to know the market and find the diamond in the rough. I hope this helps. Good luck with investing. Believe and Achieve! :)- Joe

You could just send a brief leter of inquiry such as the following:

"Dear (Homeowner),

I heard you may have an interest in selling your property at (123 Main Street). If so, could you please contact me to further discuss the price, terms and conditions you may consider. Thank you for your time and consideration - Tony (include your phone number, etc.)"

I hope this helps. I did send out this type of letter to about 20 different multi-family building owners last month. I recieved 2 calls about the letter and we discussed each of the owner's properties. It did not lead to a deal, but it showed me it could! Good luck with real estate investing. Believe and Achieve! - Joe

Hey Joe and others interested in REO's. REO agents feel they do a great deal of work getting these properties ready to list and do NOT like sharing their commissions with other agents. So if you mention to them that you will NOT take away their money or split their commission with another agent this will get their attention and they will want to work with you exclusively (provided you close on all your deals.) If you do make an offer through your own agent, pay your agent out of YOUR profits NOT the REO's commission. This will get your offers accepted! Hope this helps. =)

Thanks for the tips and information. This advice sounds like a win-win for everyone in the transaction and could also lead to future REO deals with real estate agents that specialize in REOs. I often see that there are certain agents that specialize in REOs in my area and the more we network with the more deals that may come our way. Thanks again and good luck on your future deals! Believe and Achieve! - Joe

Thanks for your help.