Going to put in offers on 3 REO houses.


Before you even decide if the asking price is to high, you need to decide how much repairs will be and ARV of the home. even at 39K loan price…then repairs…will you have good equity. you want to be in at 60-65% LTV tops…so you have room to flip or rent for cashflow…

Make all of your documentation “ADDENDUMS” to the contract and write into the contract that the contract package offer must be submitted in its entirety…


Banks are hard to deal with! You can send all that stuff with your offer, but the bank probably won’t care. When banks list the property with a realtor as a REO, they’ve already gotten at least 3 evaluations of the property: 1) a BPO before the property went to foreclosure sale, 2) a BPO following the foreclosure sale, and 3) an evaluation by the selling Realtor (and sometimes even an additional appraisal). What you send them will have little or no effect on what price they are willing to take. With banks, the key ingredient is usually time. In fact, many banks have a price reduction schedule that they use in pricing their REOs and will periodically reduce the price as time goes by. In many ways, it is almost like an auction in slow motion (over many, many months).

Soooo - while it won’t hurt anything to include your repair estimates, pictures, etc, I wouldn’t hold your breath waiting for a reply. The key with REOs is often to make periodic offers and wait for the price to come down to match your willingness to pay. I’ve had this take as long as a year!

Good Luck,


My question is since this is not a short sale, should I detail every flaw, take pictures and submit it with my offer? Will the realtor submit it to the bank?

The listing agent will submit whatever he is told by his client. Our listing contracts dictate what we submit to the seller, not the buyer. It is a waste of time to send more photos. The seller already has tons of them. Most AM’s will simply reject your offer if you submit a lot of extra stuff. You end up doing more damage to your cause.

Should I get my realtor involved? I was hoping since these offers are half of asking price, the realtor would be more motivated since she is getting the full commission

Not sure if motivated would be the word. But, the listing Realtor should be able to save you lots of time. They should know the policies of their client and instruct you on your offers.

I’ve done a few REO and sharpen your pencil and figure your offer. Forget about all the “I need reapirs crap, etc”. Just put the offer in and when it rejected, then wait and and resubmit.

Its about the math and how motivated the Seller (bank ) is . Time is on your side.