That is a very good question that many buyers are having in our current market. There are three main reasons; price, terms and paper work & process. We have to remember that when dealing with REOs, bank owned properties, we are dealing with an asset manager who will make decisions based on guidelines and policies not emotions. Let’s address these three categories that if done properly by buyer and Realtor will get offers accepted in most cases.
First is price. Currently many REOs are being price just below the market value range of a property in order to create the activity needed to produce multiple offer and obtain the highest possible price for the owner. Your Realtor should be able to give you a market value range so that you know what you are willing to pay for that property. Just because it is an REO doesn’t mean it will sell for less, more likely it will sell higher than asking price if there are multiple offers. If you really want the home put your best price and make sure you will qualify and/or have the cash to close.
Second is terms. Terms under what circumstances are you willing to buy the property. This can be the amount of cash down and financing needed, all cash, as-is, how quickly you will remove any contingencies and close escrow. You have to be able to perform on the terms in the contract and the easier the terms the better for the owner. Know how much you can qualify for, will the lender accept and as-is purchase for the loan they will give you, what repairs will they require for the property to qualify. If all cash you should be able to provide evidence of money to close and even if it is not all cash this will be a requirement. Make sure your terms are not only acceptable to you but very likely acceptable to the owner as well. Keep it simple and the less you ask of the owner the better.
Third is the paper work and process. If yo have the first two solid and this one weak, your offer will not get accepted. This part is where an experienced Realtor is so important to have in your representation of buying any home. Your Realtor should inform you on how many offers there are, when is the deadline to have an offer in, how long the response time should be, what paper work will need to be included with your offer and what will be the process for presenting your offer. Your Realtor should follow up to confirm you offer has been received and when it will presented and communicate all information to you immediately.
If you do all of the above you should have a strong edge in getting your offer accepted. Put you best foot forward when making your offer.
If you have any comments, opinions or questions I’d love to hear from you.