Foreclosure Offers in Del Norte County

REO offers are a bit different then writing a purchase agreement for a privately owned home.

In my experience there are a few common threads that most banks are looking for.

1. Most want at least $1000 earnest money deposit if not more.
2. All will shorten the inspection period to 10 days or less.
3. Most want the name, phone number and address of the buyer, and I have one that wants the buyers social security number (this is in the negotiating stage).
4. All require a prequal letter and/or proof of funds (POF) when negotiating.
5. Many want to see a copy of the earnest money check.

Some other things that makes an REO offer and negotiation different. In most instances:

• The bank has the listing agent input the information from the offer into their system without supplying the purchase agreement until negotiations are through.
• Much of what goes on in negotiations is verbal until an agreement is reached. At that point the bank provides their own addendum which spells out everything THE BANK EXPECTS. This addendum supersedes the purchase agreement if there are any differences.

Most banks will pay for a few inspections but are not to amicable about fixing anything. I have noticed that tide may be turning a bit as asset managers and lenders see that some fixes can more than pay for themselves with a higher sales price.

I have AM's (asset manager's) that get back to me on any offer submitted within a few hours and others that take a week or more. All banks reserve the right to continue to accept offers and tell their listing agents in the listing agreement that they are to submit all offers, until there is a fully executed contract.

A fully executed contract is:

• The CAR contract has been provided to the AM
• The bank addendum has been signed by the buyer and provided to the AM
• The AM has received lender approval and returns everything to the listing agent signed by the person in authority, usually the AM
• Only now do you have a fully executed contract

I have had offers where the bank has verbally agreed then changed their mind when an offer they liked better came along, however I think most AM's work hard at making sure that never happens. Most are very good at what they do and don't want to make the process anymore difficult than it already is.

With the declining economy and the tightening up of the lending industry, many banks are now asking for buyer FICO scores, pre-approval letters from their lender with conditions, buyers social security numbers and other information that I did not have to provide just 3 months ago.

Working with an agent who is familiar with REO negotiations and sales contracts is a plus for a buyer new to this type of purchase, so don't be afraid to ask your agent how many REO buyers they have assisted in the successful purchase of a foreclosed home. Many times folks think a lowball cash offer will work because we all know that "cash is King," however, I have seen banks pass up cash for an offer involving financing if it's going to give the investor who owns the foreclosure a better bottom line.

Most AM's are under guidelines on how low below list price they can go within the first two weeks of the listing, then three weeks and so on. Many can not consider any offers that differ by more than 3% in the first few weeks of a listing, even if its cash. Only agents familiar with REO's are going to know that, so keep that in mind if you are looking for a successful outcome.

Call me if you have questions about the REO purchasing process in Del Norte County and check out my websites: