Buying an REO: Making an Offer
Preparing an offer when buying an REO property is a bit like playing poker. The lender that owns the property, and the other people who are also interested in buying an REO home are trying to determine what the other players will do and how much they will bid on the property. The price is not set in stone, but it’s very important not to get caught up in the bidding when making an offer on an REO. Instead, it’s better to base your offer on the price that is best for you and stick to it. In most cases, the lender is sitting on multiple properties that are siphoning revenue so you have the advantage of dealing with a motivated seller. When making an offer on an REO property, you should make the offer in writing and be as specific as possible. It’s important to include:
The address
Clearly indicate the exact address of the REO property you wish to purchase and include the assigned identification number to this property. This is an easy and effective way to prevent misunderstandings.
The purchase price
Make sure to include the purchase price that you are offering or the lender will not take your offer seriously.
The financing terms
Lenders prefer that REO buyers have all their financing in order so that the sale progresses smoothly. So make sure to include the financing terms, interest rate, and the amount you are borrowing as well as the length of the mortgage.
The down payment
When buying a bank REO, make sure that you include the down payment in the offer to make it as easy as possible for the lender to find all your information in one document.
The closing date
It’s highly recommended to include the date you wish to take title and possession of the property to ensure that your REO offer is as complete as possible.
Your contact information
More people make this mistake than you may think! They spend a great deal of time preparing an offer for buying an REO property and fail to include their contact info. Before submitting your offer, be certain that you include your name, address, home phone, and cell phone numbers.
When you’re making your offer for buying an REO home, double- and triple-check that you have included all the information listed above, as well as anything else the lender has requested. The time you invest in making sure that the offer is complete could very well be the difference between getting the REO you really want or having your offer disregarded by the lender.