Matthew C. Putnick, ABR

• The purchase of an REO property is a more complex transaction which not all Realtors are equipped to handle. Thus an REO experienced agent knows the pitfalls to avoid which in turn makes for a better experience for the buyer.
• Buyer's agents have fiduciary responsibility to protect their client. This includes complete confidentiality, undivided loyalty, and full disclosure.
• Buyer's agents do not represent the seller.
• Buyer's agents in Illinois are paid by the seller (this means their services are free to the buyer).
• Not all REO properties are good deals - an experienced agent can find the statistics you need to make your decision.

Thinking of buying an REO property in or around Chicago? Contact Matthew at 847.910.5449 or Matt@Gibsonandjames.com to experience the value of an REO agent. I look forward to speaking with you soon!

Buying a foreclosure offers definite benefits to first time homebuyers that want to get into the market. Below are a few key points to consider once you have decided that a bank-owned property is the right option for you.

•· Get Pre-Approved for a home loan - this way you know how much of a loan you can afford.

•· Understand that REO properties are sold in "as-is" condition so there are no guarantees as to the condition of the property.

•· Contact an experienced REO real estate agent that is saavy on the REO buying process (especially the competitive bidding process).

•· Identify the neighborhoods in which you are most interested in.

•· Once you have found a property of interest, make certain to have your real estate agent determine a fair market value of the property.

•· Find out how many offers are on the REO home.

•· If you decide to make an offer make certain you have a pre-approval letter in hand from your lender to submit with the offer.

•· Make sure your real estate agent request time to complete a professional home inspection on the property.

It's not uncommon for desirable REO homes to get a dozen offers. It's also not unusual for the bank to narrow the field of competing bids to two or three offers and require the remaining interested parties to submit their highest and final offer. Going into the negotiation with a "highest and final offer" mentality will enable you and your agent to beat out the competition.

This information is provided as a service to prospective buyers thinking of purchasing an REO in the Chicagoland area by Matthew C. Putnick, a Licensed Realtor in the State of Illinois, with Gibson & James Properties, Inc. Matthew Putnick operates http://www.210days.com/, a website dedicated to the buying and selling of distressed properties.

E. Matt@GibsonandJames.com / C. 847.910.5449 / F. 773.549.2057

An REO (Real Estate Owned) is a property that becomes the property of a mortgage company after a foreclosure action is completed.

Mortgage Companies are not in the business of owning real estate. Their core business is to make money from their loans. With today's rise in foreclosures, lenders are ending up with a large inventory of family homes. For this reason, savvy buyers can seize a prime opportunity to purchase a home at a great price, while investors can bolster their existing real estate portfolio.

2 Key Aspects to consider before purchasing an REO

1. Risk - The greater the risk the greater the reward. Its important to know that REO's carry some risk. They are always sold in ‘as-is' condition with little or no information concerning the condition of the property. Locally REO properties are often winterized which means that the utilities to the property have been shut off. Most REO listing offices will not allow the utilities to be turned on even to inspect the property.

2. Hard Work -Generally REO properties are dirty, can be filled with junk, and may be without appliances/cabinets/vanities/countertops etc. In addition, a vacant home is a prime target for burglary and vandalism. For these reasons buyers need to be realistic about the cost to clean up or fix up the property to live in or to sell. If you don't have the extra money for repairs or don't like the idea of putting in your own time to fix up the property, then an REO property will not suit you.

The REO market is risky and does involved work - with that said the best way to minimize your risk and amount of work is to form a team of real estate experts around you.

1. Realtor - Using an REO experienced Realtor, like myself, is a must. Not all REO properties are good investments and an experienced Realtor can guide you to a solid investment. Real estate offices that list REO properties tend to have a huge inventory of listings and lack any type of customer service that you will need. An experienced Realtor can advise if the price is a good deal and can make certain that the transaction moves forward.

2. Attorney - When buying an REO - lending companies will have you complete their own contract and disclosures. Since each lending company has their own documents it is imperative that you retain a Real Estate Attorney that has experience in assisting buyers purchase REO properties.

3. Inspector - An experienced home inspector is crucial! It is important that you know what repairs are needed and the cost associated with those repairs. It is the only way to accurately estimate your costs to restore the property. Even if the utilities are turned off you should hire an inspector. REO properties are sold "as is" with no warranties or guaranties. You must look at this property with an experienced inspector to understand the financial value of your total investment.

4. Lender - Should you use a conventional loan? A rehab loan? An FHA loan? A good lender will highlight the pros and cons of different loan programs so that you can make an educated decision. Your choice of lender can be the difference between closing on a property and having a deal fall apart on the day of the closing.

If you have the patience, the right attitude, and experts on your side, it is likely that you will find an REO property that is exactly the deal you've been waiting for. If you think purchasing an REO might be a great way to build your wealth call me. I am always happy to share additional knowledge and/or assist you in looking at some REO properties in any area of the city or suburbs of Chicago.

One of the key aspects of the real estate transaction that is often overlooked is the negotiating process. Whether you are buying or selling your approach to the negotiating process has a tremendous effect on the end result.

The art of negotiating is won and lost before you sit down to the bargaining table.

1. Know the market

It is very important to do your homework and know what is going on in the market you are trying to buy or sell. Since real estate prices are so specific to various blocks and neighborhoods successfully negotiating a good deal starts with thorough research and being prepared.

2. Set Limits

Before you start negotiating, define your limits. Know what you are willing to give up in order to get what you want. Setting limits means establishing the point at which you are willing to walk away from the negotiation process to pursue an alternative course.

3. Emotions

It is hard to separate your emotions of ‘wanting your dream home' or ‘selling the home with all you lasting memories', but the person who can separate their emotions as much as possible will have a better result when it comes time to negotiate. Taking some time to think and reflect about offers and counteroffers can be very beneficial to keeping your eye on the prize while keeping your emotions at a distance.

4. Listening

Good listening skills is a crucial characteristics of negotiating that is often overlooked. Before you begin to negotiate, try to find out the motivation of the other party. Sometimes a flexible closing date can be more important then money. Having this information can help you formulate a stronger offer going in. Also, while the negotiations are ongoing, it is important to continue to listen to what the other party is telling you.

5. Focus on win-win instead of winner take all

Entering the negotiating process with a friendly demeanor sets the right tone from the beginning. A friendly demeanor does not mean to agree, rather it is about building mutual respect, building a sense of fairness. Your ultimate goal should be to create a win-win situation for all parties. A win or take all approach often doesn't end well.