Motivating a Bank

With much of the commercial world overheating, I’m going to fix and flip some REO’s. I’m a cash buyer. Aside from a bank statement as proof-of-funds in my offer, would a photocopy of a cashiers check for the full offering price further motivate a bank to sell? Or, would they even care?

Would buying through my self-directed IRA tend to hurt, due to the added complications? Or again, do they care.

Other than the obvious – making a full price offer (which I do not intend to do) and/or ten day close – does anyone have any tips on what I can do to make them say yes quickly? Thanks.


My experience is the best deals take time. Get the deal you want at the right price and not a penny more. Cash does motivate banks, the option to close quickly does as well. Not sure on your IRA question the bank cares. Show them the money.

If you come with an offer of anything other than cash or traditional lending the Asset Managers will more than likely not waist their time with you. Cash offers are generally the most desirable because of they are traditionally able to close much faster, so even if a cash offer is less than another offer they may have that is financed, the cash offer often gets it.

A photo copy of anything showing proof of funds will work with some AM’s who are newer, lazy, and/or who just don’t care. The seasoned AM’s require specific proof of funds that they can verify or that are verifiable. The larger the number the more likely they are to actually check. Bank statements are sometimes ok, but a letter from someone at your bank with a name and contact number is preferred and in many cased becoming a requirement. I for example only accept phone verification directly from the bank, and I never use the number on the letter to contact them, rather I start with a number I know for a fact is to that bank…like there 800 number. There has been so much bank fraud dealing with fake proof of funds and borrowed proof of funds that many AM’s are catching on and really checking. Not to mention the Feds and other gov branches and private corps are focusing more on ALL of the players involved rather than just the buyers and loan officers. Underwriters, AM’s, LMR, and so on are becoming more liable for cases assigned to them.

I’m not saying you are doing this, but there have been other threads talking about how to show proof of funds, and many people suggest and are looking for that borrowed funds to use as their POF. The problem is that it defeats one of the primary purposes of being able to show the funds in the first place…I’m not going to go off on that, I’ll save it for another topic. But the point is that whatever you use for POF these days had better be your actual money and not fake paperwork, or money that is not your’s that you pretend to the bank that it is. AM’s are being asked, even required, to report fraud situations whereas in the past they would just kill the deal and move on.

I suggest you contact REO consultants in your area to advice you on negotiations and purchases of REO’s. Their expense is often well worth the money you save and make on the properties they consult you with. My opinion is that the best REO consultants are those who have been AM’s or who have been negotiating REO’s for more than 5 years, such as a well seasoned REO Realtor. I suggest staying away from the REO Consulting companies and go with an actual person. From what I have seen the REO Consulting companies don’t really know how to negotiate with the AM’s, rather they just know protocol and general concepts. Individuals, such as my self and small number of others here in the forums, better understand the mentality of the AM’s and how they work. I can only guess that this is because they have practical experience as or directly with AM’s individually verses learning how it works in class room.

The best tip I can give you to encourage them to accept an offer is to justify it. Show the AM why your offer is what it is. Spell it out very clearly and as simply as possible. Show proof that they accept, such as comps and contractor bids. Any other information you can provide to them to accept your offer will help. The reason why is because they have to do the same thing as to why they accepted the offer. If their client, the bank, asks an AM why they accepted an offer for as low as they did, they had better be able to justify it. When you, as the buyer, put that proof into a single pkg (which your offer is a part of) you are providing them with all the information they would need to make that justification to their client, the bank. The more the AM can sell your justifications to the bank the more willing they will be to accept your offer.

GooD LucK! :beer

Also, keep in mind that AM’s typically have hundreds of properties each. Quick for them IS NOT the same meaning as it holds for the rest of the world, especially investors and Realtors! If you get an answer in less than a week, count yourself lucky that you’re dealing with a well organized or new AM.

The more prepared you are the faster your deal will move with them.

GooD LucK! :beer