Let's take a Train Ride!.... On How to buy REO properties (Part II) - Finding the right property

OK so I promised a train ride.  I always try to keep my words... so lets move on to Part II on my REO training. 

• We now have our list of great opportunities for our buyer.
• We have advised our buyer of what are the standard requirements for bank owned properties
• We have stressed that the buyer will need to advise his loan officer that he is looking at REO properties and that he will probably need a Bank Acceptance from the lender so they can get to work on that side of the requirements.
• We have done our mapping, set our time and are ready to get a going on finding our buyer their home.

(Oh I mentioned that we already had the essentials in our list of listings: location, size, amenities, and other things that the buyer told us at the beginning that they wanted in a home).  Today we are only looking at 3 homes in this area.

Let get to the train...... do you have your ticket?

House #1:   Bottom of the list.  Yes. Lets show the least of the houses first.  So we can have a big bam for the buyer before the tour is over.  This property states that it needs some TLC and that the bank will not contribute to the repairs and does not know what all is needed.  The buyer is not impressed.  We move on.

House #2:  This is the right home for the buyer - we think.  The buyer has a smile on their face and they are making positive comments about the house.  That's good - it has curb appeal!  We walk around the house first and then go inside.  They wanted to see the yard, a large yard is important to them.  They like the yard.  Now inside.  Nice paint job, everything looks ok at sight.  They like what they see, except the washer/dryer hook up is in the garage.  That's a biggie with the wife.  We keep looking, they say they like it but want to see #3 house.

House #3: This one is in a good neighborhood, just like the description on the MLS.  It is a little older in years but promises more of the items that the buyer is looking for.  The price is lower and the bank requirements sheet is not as long as the others.  The buyer look at the yard they love the size and condition.  There is a school and park next door and it is located in a cul-de-sac.... So far beautiful.  We go inside... needs painting and it wasn't mentioned on the MLS.  Kitchen is somewhat upgraded, not finished.  There's a refrigerator and stove - nice ones too.  Back door is stuck, panel on the walls that has been painted over and that is peeling.  OH NO.  Floor furnace and the top are off and to the side. Bathroom was just upgraded but there is a vent right over the bathtub.  The buyers are still interested in the style and the other "aged" assets. So we're still looking.

The buyers look at the agent and say they like it, what do we need to do to make an offer?!!!  The agent pulls out the list of "offer instructions" and go over that again with the buyers.  They say they want to make an offer.  The agent, being a good agent.... Will tell them if they are really interested in this property it is best to have a home inspection first and even a termite inspection so they know what repairs they might be facing - especially since this is an older home.

The buyers are serious so they don't mind footing the expense for a home inspection and termite inspection.  The agent gives a call the to the listing agent to make sure there are no other offers already submitted and get some other information on the property before she go to the next step of setting up the inspections of the property  - and before she make an offer.  This is where the special instructions are important, when the buyers like a property is ready to move on it.  The agent need to know what move on it means....

The key here is to have your list, let your buyers take their time at each property and make their own decision.  You be available to tell them about the area,  property and the requirements to purchase the property, check with the listing agent and do your homework.  Advise them to get inspections..... or they may regret the purchase.

Check back later for Part III - which will get into your Mortgage broker can do for you (before you put out any expenses).

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