REO 2 days old!


I would like to negotiate with the bank on a property that went to sheriff’s sale on Monday but went back to the bank as an REO. I thought that because it is so new they may be willing to sell before they have to put any more money into it.

Any suggestions on how to get the best results? I guess what I’m asking is…is it still treated as a short sale? Do I still ask for a short sale package or just compile the necessary numbers and submit an offer?

I appreciate any suggestions!


It’s not a short sale after the foreclosure sale. The bank now owns it and you will just deal directly with them (or their realtor) to buy it. If you call them TODAY, you might be able to talk to them before they assign it to a realtor. If you have an offer and cash in hand, you might just be able to get a good deal. It’s certainly worth the 10 minutes it will take to try!

Good Luck,


Good response property manager. I didnt realize it officially wasn’t called a short sale after auction. I thought it was still considered a short-sale because they are selling the mortgage for less then the loan amount.

If you call them the day after the auction to inquire that is your best bet. If you wait longer then around 48 hours, it’s too late and the realtor will get his hands on the pie which means less of a discount for you.

Thanks! I’ll give it a try.

Please let us know how this turns out and if you are able to get this house at a big discount. My experience is that banks won’t even look at selling at a discount when they first get a property. It usually takes at least 60-90 days…

I’ll keep you posted.

It isn’t a short sale situation any more because the foreclosure extinguished the mortgage. The bank has the property free and clear. There is no mortgage to short.

Selling the mortgage at a discount is not a short sale either. It is simply selling the mortgage.

This brought another question to mind for me that I’ve never gotten answered (mostly because I never asked). If someone has a second mortgage on a house and it’s foreclosed by the primary lender, does the second mortgage cease to exist or do they still have a lein on the title that you will have to deal with if you buy the house from the primary lender??

That’s a good question. I’d imagine that any junior lean would no longer be an issue. Otherwise the bank wouldn’t be able to list the property with an agent.

If a first mortgage is foreclosed on the second mortgage is wiped out. I just had a foreclosure where I had purchased the note for the first mortgage. No one was there from the bank that held the second mortgage to bid on it so they lost out and got nothing.

It doesn’t matter if you get in touch with the asset manager or not before they assign the property to a Realtor. If you call and try to buy the property before it gets assigned to Realtor they will tell you that you will need to wait until it is assigned, then you can deal with the Realtor about purchasing the property. Leave your contact info and ask them to give it to the Realtor once they list it. If you push past that you run a good chance of pissing off the asset manager, then they won’t do anything to hurry the property along.

But yes, you can get a good deal on a property as an REO if you are making an ‘AS-IS’ offer on the property prior to them doing anything too it. Cash offers are your best bet, but solid proof of funds in any form will work.

Once the property is through the foreclosure it then becomes and REO, which means a short sale pkg is pointless. At this point any offer you make on the property follows the same rules for putting any offer in on a property. The fact that you were working a short sale prior to foreclosure can sometime play a part with some asset managers in the acceptance of your REO offer.

Some times the asset manager would take into consideration some of the info in your short sale pkg. I would suggest offering the info to them. Give them the table of content and your supporting docs in one PDF. Short and sweet. Too much info can work against you rather than in your favor. Remember that any personal info about the homeowner is null and void at this point and you should not provide it to anyone.

Also, in this situation be sure to NOT let the listing agent charge the buyers agent commissions! Almost every single time someone puts in offers on the property who was attempting a short sale prior to foreclosure the listing agent will claim them as a buyer they found to justify the buyers commission. Don’t let them do it. Keep that 2% to 3% yourself that you will otherwise have to pay.

GooD LucK! :beer

Hey Dave,

Thanks so much for your response. I appreciate it!

What is your input about calling the lender immediately after a foreclosure? Do they get assigned right away to a realtor or does that take a couple of days? What would you call this if it’s no longer a short-sale? I would like to use correct terminology when calling the lender.

Have a great day


If you know the right person at the bank (lender), you can indeed make a deal directly with the bank before it goes to a realtor. It’s not going to cost you anything to call and talk to the bank. As with many things in real estate, who you know is often the key.

What would you call this if it's no longer a short-sale?

It’s called a REO - Real Estate Owned (by the bank). However, if I was talking to the bank, I’d just tell them that I was interested in buying the property that they own at 123 Main Street. Before you call the bank, be sure you have the money arranged. You’ll lose credibility fast if they are willing to sell at your price and you can’t do the deal.

Good Luck,


Hi sir. I do work for Countrywide as a loan officer but I do not know who to directly contact. The Countrywide REO website is:

I am so slammed during the day at the office that I really don’t have a lot of time to investigate anything. If I am able to come across a contact, I will definetely let you know.

Have a great day


When the home is sold at the Sheriff sale it is no longer a short sale. When the home becomes an REO you can negotiate with the bank to purchase the home for less than what they bought it for. One technique I use is to have cash, and let them know that you are willing to close inn 3 days. Sometimes it works because they know you have the cash and they want to get rid of the home. Banks are not in the business of selling homes they offer loans. Try the sense of urgency. Good luck