Carefully read those bank REO contracts!

Carefully read those bank REO contracts!

Hello DG Fam,
I've been putting in offers on REO's, and as you know, most banks have their own unique contract you must use, can't submit your standard MLS agreement. Don't get lazy and assume the terms are agreeable - read thoroughly. They are boring and a bear to get through I know, but here is what Bank of America's says - I won't make you read the actual text here. If you have an inspection contingency - which of course you should - they have the right to see a copy of your inspection report AND they have the right to remedy the areas to which you object INSTEAD of letting you out of the agreement! Yikes - there goes that escape clause. Further, though they will accept a POF letter initially, they can also insist on seeing your bank preapproval, or a copy of an account showing funds, and within 7 days (I think it was 7) they want to see your bank loan application if not a cash deal. There goes the escape clause for funding approval. Now, it seems unlikely that a bank this "savvy" is going to accept obvious weasel clauses like "upon partner approval", but I'm going to try something! Let me know what has worked for you in such situations.
BEWARE what you sign out there!!!
SOOOOOO - marketing remains - ever increasingly more -the key to finding deals. Can anyone answer this question?
How many Bandit Signs can 1 Sharpie Magnum permanent marker make, before it runs out of ink?
I have the answer if you want to know Smiling
Keep fighting the good fight...
Gena

__________________

Blessings & Favor,
Gena.
Follow my Blog: www.genahoriatis.com

I can do all things through Christ who strengthens me. Phil 4:13

Psalm 1:1-3


Great Information

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

Curtis Fillers
(Charlotte,NC)


great post

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

__________________

Valerie

“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss

"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown

My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...


Hello Ms Gena

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.

__________________

Steve

We seldom get what we want, but we will always get what we expect.


Great post Gena. Steve that

Great post Gena.

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


Answer to the trivia question -

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.

__________________

Blessings & Favor,
Gena.
Follow my Blog: www.genahoriatis.com

I can do all things through Christ who strengthens me. Phil 4:13

Psalm 1:1-3


These two

steinway024 wrote:
they have the right to remedy the areas to which you object INSTEAD of letting you out of the agreement! Yikes - there goes that escape clause........they can also insist on seeing your bank preapproval, or a copy of an account showing funds

will wreck a deal in a heartbeat.

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.


Thats awesome Gena

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


REO/short sale

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


Shawn - love your enthusiasm and you are close

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.

__________________

Blessings & Favor,
Gena.
Follow my Blog: www.genahoriatis.com

I can do all things through Christ who strengthens me. Phil 4:13

Psalm 1:1-3


Elix - what happened...

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

__________________

Blessings & Favor,
Gena.
Follow my Blog: www.genahoriatis.com

I can do all things through Christ who strengthens me. Phil 4:13

Psalm 1:1-3


isn't everything negotiable in real estate?

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)

steinway024 wrote:
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


It is always helpful to hear

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

__________________

Know what truely matters in life, consume yourself with that, and you shall never be disappointed, afraid, or alone. Give your gratitude always, give respect to everyone, and you shall never be anything less than what matters the most. Give praise to the Lord, forgive yourself and others, and with all of this together you will get a taste of what heavens lie ahead.


Sorry if I wasn't clear

steinway024 wrote:
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

My buyer put an offer of $250k, which was extremely low to begin with, with an explanation behind his offering price.

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


Thanks for the explanation

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.

__________________

Blessings & Favor,
Gena.
Follow my Blog: www.genahoriatis.com

I can do all things through Christ who strengthens me. Phil 4:13

Psalm 1:1-3


Basically....

steinway024 wrote:
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.

Banks want their money back. They are not half-arsing anymore and what they are doing is illegal and well within the boundaries to do so.

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


Gena,

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.

__________________

Always Looking to Acquire Houses | Always Looking to Amaze Investors


Bill, they have no incentive to 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,

__________________

Dana w/ Crossroads Solutions LLC
http://www.DanaLeigh209.com
http://www.DanaLeigh209.net
http://www.ULostThis.com
---
I am direct to the VP of a $100 million dollar open-ended debt and equity fund which actively writes checks to fund businesses with an EBITDA of at least $1 million a year. We fund also have access to up to $500,000,000 for the purchase of distressed real estate, specially commercial $7,500,000 and up.


Courthouse Sale- Foreclosure

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?


Did I post in wrong place no reply

agcat wrote:
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

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.


No show at courthouse for bids

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.


Syndicate content