Tips For How To Write An Offer on a Foreclosure for Agents and Their Buyers

hi everybody i'm angela adams with the adams family real estate services brokered by exp and we have been receiving a lot of questions lately about how do i submit an offer on an reo property and how do i make it competitive so because we are the default experts of socal i thought what not better way than just to make a quick video about it to break it down so let's dive right in [Music] [Applause] all right number one if you want to be competitive no low ball offers so despite misconception the seller knows what the home is worth they they know what they're doing um prior to putting the home on the market they actually order their own appraisal they order multiple broker price opinions and they take all this into consideration including the home's condition and overall market condition in determining the list price so [Music] now if you find a property that's maybe been on the market a little bit longer and is considered aged you can see some price reductions on the list price on those but as far as a newly listed reo property if you want to be competitive just understand you need to be coming in extremely strong price wise all right number two understand the motivation of the seller and this goes for any property obviously we all know the market's really weird right now they're super low inventory buyers are extremely discouraged some have even already lost out on bidding wars maybe and they're thinking about getting creative this is not the place to get creative you're dealing with a corporate seller and the motivation of the seller is really price driven so if you want to be competitive in your offer focus on the terms of your offer focus on the price and removing as many contingencies as you can making it as strong and as clean as possible now of course like an appraisal contingency is fine maybe you want to ask for some some closing costs or things like that that's completely fine if you want to ask for closing costs but just like in any retail transaction in the competitive market you know every time you ask for concessions it weakens your offer so just try to make it as strong and as clean as possible and that will greatly increase your chances of securing the property okay so number three most reo is being sold as is where is and without warranty so it's very important that you do not try to put in offers on these properties site unseen you need to go out look at the home walk through it inspect it make sure that the condition is something that is acceptable to you and to your lender and it is completely fine if you put a inspection contingency in your offer just know that typically the seller is looking for a five day inspection contingency so don't put in seven five is acceptable but anything past that you're probably not going to get get them to uh to go for that so but understand that in inspection contingency in reo because the property is being sold as is it's really just um it's for informational purposes only so you're going in the home and you're looking for major defects now if you find something major like a cracked foundation or significant termite damage or something like that that the seller was not already aware of and it hasn't already been reflected in the asking price then that could be something that could be negotiated but as far as like minuscule repairs go that would be typically negotiated in a retail transaction those are just not even going to be discussed they're not going to make repairs and they're not going to reduce the price for for items such as that okay all right number four understand your loan product so if you are obtaining financing to purchase the home you need to make sure that your loan will actually approve of the condition of the property some reo is in disrepair and needs a good bit of work and there's some loan products out there that just won't lend on homes that need a certain amount of repairs so talk to your lender up front if you're interested in one of our reo properties that needs a lot of work and just make sure that your loan product will in fact lend on it and if you're not sure your lender's not sure just feel free to reach out to us and we can try to try to help navigate that for you [Music] all right let me look at my notes here let's see number let's see where am i oh number five sorry i've got ten things and i'm already getting like lost at five okay number five submit proof of uh verifiable proof of funds so if you're paying cash for the transaction you want to make sure that it's verifiable proof of funds for your cash okay and then number six you want to make sure that if you are obtaining financing like we discussed earlier that you are only submitting a pre-approval letter the bank will not accept a prequal letter they're only looking for pre-approval letters because they want to make sure that the buyer has gone through those extra steps and can in fact qualify for the loan product that they're trying to get all right number seven embrace the online portal so now in this day and age with reo there's a lot of servicers and and banks that like to use online portals online offer submission programs and i know that it can kind of be a learning curve and it can feel like a little bit more work but understand that there's a lot of pros to using these programs including just accountability and fairness so when you're using one of these systems you're really getting this assurance that your offer is in fact being submitted and being shown to the seller which can be extremely important in especially multiple offer situations um you know imagine just one that you've recently been in if you're helping you know retail clients or whatnot you know and there's just countless other offers you want that assurance to know that you're getting a fair shot and and everyone is is playing fairly so i would say just embrace the online portals they are your friend all right number eight the name of the buyer please be sure to put the full legal name of the buyer on your offer and make sure that's the full name they want to use because that's the name they'll be signing at closing on all the documents you cannot put and or assignees so unfortunately in reo for investors out there listening to this they will not accept signable contracts so you just don't even waste your time it's not worth it why you know they're not going to accept it another thing that i want to mention is um just to kind of touch on this with the investors hard money does not equal cash cash is not equal hard money so if you have a hard money lender do not put on your contract or excuse me your offer that you're paying cash because it's an entirely different process at closing with the title company how they have to title the property and if you're dishonest and not transparent about it and they find the seller finds out later they could cancel your deal so just be honest about it hard money is fine you just need to be transparent about it and show verifiable proof that you're trying you know who this hard money lender is and the processes that you're going through to try to pain this financing all right number nine we're almost done no selling agent commission if you are the buyer's agent representing yourself so all that means is if you have a license you're completely fine to represent yourself but please know that um most almost always a reo seller will not pay you a commission if you're representing yourself to purchase the property all right and then finally number 10 is just follow all the instructions very carefully and if you get stuck call us with questions we're always here to help help you navigate this process and make it as easy and as streamlined as possible we wish you the best we hope that you can secure one of these properties especially if it's one of ours and hopefully that these tips will help you be able to do that so if you like this video please give us a big a big thumbs up and subscribe or follow our channel so you can be notified about future upcoming similar videos thanks everybody have a great day bye

Channel: Adams Family RES

Views: 568

Keywords: Foreclosure, Reo, How to write an offer on a foreclosure, The adams family real estate services, Reo broker, SoCal, SoCal real estate, Orange County foreclosures, Orange County short sales, Reo broker in Orange County ca, Real estate tips, Foreclosures in California, Stop foreclosure in California, List of ca foreclosures, Robert Smith-Adams, Angela Adams REO, Real estate investment, Real estate investor, Real estate advise, House flipping

Id: kqUVWEF6fB0

Length: 9min 48sec (588 seconds)

Published: Thu Jan 28 2021