How to Present a Strong (not High) REO Offer

I have been making offers to Banks thru my realtor (all REO’s seem to be listed thru Realtors). We are using the 65% of ARV less repairs model and are getting turn downs right and left. We are making offers on properties that have been on the market for at least 90 days and usually 120+ days.

I have a mentor who has suggested that I submit a photocopy of a cashiers check for $5k to $10k in lieu of a bank check from my account as Earnest Money. The idea is that you present a stronger offer (by showing a Cashiers Check) but don’t have to come up with 15 of them. You also have more control over the Earnest Money than if you leave a live check in the possession of the realtor.

Any ideas on this technique? Other tips on how to present a compelling offer?

obviously all cash offers win out,but if you can’t do that go with a higher EMD, possible not make it contingent on financing,if you really know what your doing you can go without inspection period (I go without third party financing addendum but always get an inspection period),

Being ready to close quick isn’t always better because it seems like the banks have needed time to get clear title recently

Not a whole lot of experience with dealing with REO’s, but I am in the middle of one now. Here’s mine below.

I am attempting to present an offer on behalf of my Aunt to buy the house w/ cash. If we get it for a good discount, my Aunt has agreed to give me $5k as a gift.

So here’s what I am doing. The property has been on the market for over a year now which is a plus. I’m not sure what they are asking for it, something in the 65k range. The property is tax appraised for 75k and comps in good condition go for around this price.

I am basically putting together a short sale packet with a cover letter talking about how this is a cash offer and shows our offer and an outline of the next part of the packet. Here’s what’s going into the packet.

  1. Pictures of every single thing wrong with this property and comments on what needs to be done in the picture (ie replace carpet, roof, rid of mold, etc.)

  2. CMA of some of the worst properties in that neighborhood that have sold within the past year (our market really hasn’t gone down, only stayed about the same). This CMA showed the property to be worth around the 41k range, so I pretend this is the new FMV of the property.

  3. Repairs of the things I talked about in the pictures by a cost analysis to get it up to the 41k range or our FMV we gave the bank coming up with our offer of around $30k.

  4. Proof of funds letter coming from my aunts bank with the exact amount shown on our offer to prove that we have the cash funds to do this deal.

  5. I like the idea of having a copy of a cashiers check for 5k to try and seal the deal, might put that in there.

  6. ???

Is there anything else that I am missing here? What other things should I include to have a better chance for the bank to agree to our offer?

Any help would be appreciated.

Sounds like you’ve got it covered. How fast can you close on the deal? The bank might like to get it off their books.


With REo properties the banks are looking for 80 % of the list price,So your ARV minus your rehab costs in addition to you other costs need to make sense with that rule.I am not sure what state your mentor is in but photo copies of checks will not help much.Alot of the Reo properties will be open to owner occupied first so your offers wont even be considered until after the 1st 30 days.

Best of luck !

Angelface - the property has been on the market for over a year now with multiple realtors so I’m hoping the bank is getting tired of this listing and are willing to get rid of it at a discount… As per the owner occupied part; it is going to be owner occupied by my Aunt so there shouldn’t be any problem there. She is legitimately looking for a place to live, and I would like to get her into a home not at retail, and I will help her get the property into retail condition after she buys it.

Furnishedowner - good call, we should be able to close as fast as the bank wants to… I will put a statement in our opening page saying we can close as soon as you (bank) has the paperwork ready.

How long do you think it will take the bank to get it all figured out? I have worked on some short sales and things toooook fooorrrreeevvveeerrrrrrrr… Is it about the same timeline with REO’s?

Yes, I do have heard this and I feel the banks require that much of time to get ready with it. I have to know more in details.