Top Tips to buy a Bank Owned Property (also called REO or Foreclosure

  Include a Pre-Approval (NOT Pre-Qualification) letter or proof of funds with your offer. Failing to do so will often lead to rejection or lost time while they have to ask you to provide it as another offer gets accepted while yours was delayed.

  Do NOT add contingencies to your offer more than needed as banks prefer offers with least contingencies possible. The lesser the contingencies, the more are your chances of offer getting accepted by the bank.

  If you are applying for a FHA mortgage, check before making your offer if the home can even get a FHA mortgage in it based on its condition. You can easily get a list of what is acceptable to check if the home meets the criteria or not.

  When making an offer, you should not base your offer on deducting a specific percentage off the Listing price. You do not know if that listing price is market value, priced above market value or already priced at a great discount below market value. Assess what the home is worth in today’s market and deduct for repairs.

  Do not include time limits for the bank answering your offer, Banks work at their own pace. Be prepared to wait for an answer and signed documents. Putting deadlines for answering your offer will simply get it rejected or ignored.

  Get a Home Inspection done by a Certified Home Inspector. Do not assume everything is in working order without testing it BEFORE you make an offer. Virtually all homes are sold ‘As Is” where the BANK will not renegotiate after a home inspection or fix anything not asked for in your initial offer.

  Do not assume the bank will just grant you an extension if you are not ready to close. Cash offers and conventional loans are expected to close within 30 days and FHA and USDA loans are expected to close within 45 days.

  Do not assume all Listing Agents of Bank Owned Homes are the same. There are a few very good ones and MOST are very bad ones. The sale also only goes as well as the listing agent is attentive to their listings and uploading and updating offers.