Buyers Agents Learn the rules of the REO offer

Love it,

have a few of those myself.

Good Rant, lots of insight to how you have been annoyed so often.

Hey stranger! You should hang out here more often!

So, should I be honored that a listing agent told me a few months back that although there was more than one offer I was the agent she told the bank they wanted to work with???? AND, it closed! Phew! I knew the game because it's not much different than the guidleines when I am the listing agent for relo. - as far as documentation. OR, any other seller we represent for that matter. It's called dotting our i's and crossing our t's. I worked with a buyer a couple of Satrurdays ago as a buyer's agent to somebody else's relo. I told the buyer to take the entire weekend because I could write it up but can't expect answers until Monday. This business - it's just plain common sense. Hellooooo!     

Actual email from a agent, sent in sunday morning on a offer submitted saturday night....

Andrew:

I have not heard back from you.  Please let me know the status.

Thanks.

Andrew:

I faxed this offer to you last night.  Please confirm receiving it and complete.

Even though the seller never lives on the proeprty, the seller still knows the proeprty info on the 1st page of the SPDS.  If you have that filled out, I would be happy to have my client to sign it.  I cannot fill out the SPDS for the seller.  Please let me know how this would work.

I have included everything in the fax except the SPDS.  The faxed offer is attached here also.

How long this lender will reply? 

Also, I would like to get your contact phone number besides e-mail.

Thanks for getting back to me.  I look forward to hearing from you.

Jeff-

Good post on the rant side!

Sean

I hear ya on this one. I think I will print your rant and read it at our weekly sales meeting.

Can I print this post. And have it under 'attached docs' on MLS. ( just kidding of course)

Jeff -

I had to chuckle when I read your blog.  And I could add another one...

If the seller's addendum says they will charge a per diem if buyers dont' close on time through no fault of the seller, why is a selling agent surprised if the per diem appears on the HUD.

Great post, I hate that the Buyer's agent do not follow the MLS instructions even if you post instructions on MLS they do not read them and then they get upset because their offer was not send to the Seller. If instructions on MLS say please contact LA for addendum and Buyer needs to be Pre-Approved by xx Mortgage please follow the instructions and dont send me a pre-approval from Mr. perfect Loan officer and also I do not need to know how many years  have you been in business 10, 20 30  or 40 I do not care. Me only 2 years and I am getting lots of Business please Buyer agents we do not need to know how long have you been in the business just follow instructions and let's close the escrow and help the economy and please do not complain!!!!

Hey Jeff,

Clear, concise, easy to understand post   (just like an REO Addendum!)

My favorite is #2   (did I say that?)

Thanks!    Laurie

Good Rant.  Agents can barely write offers on a standard sale; an REO is I am sure a nightmare!

I actually attach this to some of my REO listings in our MLS - I find it helps!

Here are some tips and tricks for purchasing REO properties.  These are not specific to any property or any seller, but just general tips.  These tips don't apply to HUD Properties.

• Submit offers on state forms.  Check with seller's agent if there are additional forms from seller that are required to be submitted with the offer.
• Historically, lowball offers seem to get countered at about 97-98% of the current list price.  Your buyers are welcome to offer any amount, just expect really low offers to get rejected or countered at near the list price
• Offers with contingencies, lease purchase offers, offers to rent are typically rejected.
• Please give the seller at an absolute MINIMUM 3 business days to respond to the offer.
• Minimum $1000 earnest money check made out to listing agency.  Some sellers require this to be in certified check or cashier's check, ask the listing agent which is appropriate.  You will need a copy of the EM Check submitted with the offer, but you hold it until either 1) there is a deal, (at which point you'd get it to sellers agent) or 2) you realize there isn't going to be a deal, and you can give it back to the buyer.
• Some offers asking for assistance with buyer's closing costs go through and become deals.  Don't be afraid to ask for BCC, but try to limit the amount to around 3%.  Make your offer squeaky clean........surveys, termite contracts, home warranties, repairs, etc. usually seem to get countered out. 
• If there is a seller's disclosure, it's going to say they don't know anything about the property.  The seller (being a bank or asset management company) has never lived in the home, and only knows what the list agent and other BPO agents have told them about the house.  You will get a Lead Based Paint disclosure if the home was built prior to 1978.
• Make sure your buyers know REO Properties are typically sold AS IS, WHERE IS.  They're welcome to get an inspection, however, don't expect any repairs to be done by seller, and don't expect buyer to be able to perform any repairs prior to closing.  Most sellers will let you out of an offer if the inspection winds up showing the property needs more work than the buyer would like to deal with.  It's important to note this as well when your buyer is considering what kind of loan they will be getting.  If you're not sure if a particular home would pass VA, FHA, RD appraisal/inspection, educate your buyer about the possibility of needing to get a conventional loan.  Even then, many conventional lenders are beginning to require repairs prior to closing, check this out closely.
• Speaking of inspections, depending on where the property is, the list agent may have difficulties getting all of the utilities on for an inspection.  Please work with them as some utility companies can be hard to work with. Also, there may be difficulty scheduling de-winterization.  Be understanding.
• Pre-approval letter or proof of funds for cash purchases MUST be submitted with offers.  Proof of funds is actually very easy.  A bank statement, a printout off the buyer's account from their on-line bank service, or even something faxed over from the bank is all you'll typically need.
• Don't ask for closing dates the last 3 business days of any given month. 
• Once you submit an offer, assuming it's not rejected, you'll go thru a negotiating phase - most of this will likely be through phone and e-mail, however, keep documentation on all of it.  Once you have a firm deal, most likely the seller will issue paperwork that is an addendum that gets attached to the contract that outlines the final details.  Your buyer would check it over, sign it, then it gets sent back to the seller who also checks it over, gets their investor backed approval, then signs it.
• It's not a "real deal" until everyone signs off on the final offer/acceptance/ addendum paperwork.
• It usually takes about 3-5 business days to get a property under firm contract - then it usually takes 3-4 weeks to close.  It can be done in shorter time, but with foreclosures, it's better to expect it later and be surprised if it can be done earlier.
• The listing agent is dealing with an Asset Management company or a Bank that is in another state (if not in another country), most likely a different time zone, and dealing with people via phone, e-mail and internet.  The Asset Management Company or Bank representative who is their contact is most likely dealing with 200-500 properties at any given time.  Be patient.  The listing agent is probably doing their absolute best to get you answers, documents, etc. but remember, it's not like they can just drive over to the seller's office and get what you need RIGHT NOW.

One last thought.  Even though the seller is an Asset Management company or bank, the list agent's duties are still to the seller, not your buyer.  As in any deal, a positive cooperative attitude is necessary.  The list agent may be just as frustrated as you are when it comes to getting things done quickly.  Please respect the list agent's responsibility to their seller and remember, they're human too!

ill tell you... i agree with all of that! we almost need to let these buyer's agents know that we can get them a quicker response if they give all of the correct info for us to submit their offer. i have been educating my staff on what is needed when we represent the buyer so that our offer looks most complete and easy to deal with.

Great post & comments,

I'm going through a nightmare deal right now....buyers do not get 'as is'....they aare going to loose the deal & get bumped because they are getting way too greedy

great post. Thanks for the tips.

THIS MADE MY DAY! Great post, thanks for putting it out there. I get these all the time, along with buyer's agents who constantly complain to the office manager when I don't return calls asap or don't have time to respond to these types of questions, then it is communicated to the office mgr and his boss that I'm not doing a good job because of the phone calls and complaints from buyers agents and sometimes my AMs are contacted by other people in my office or other agents and it has an adverse affect on my business! 

I realize that most of the time we need to try to educate or coach them along, but I believe a lot of this can be resolved by reading and following the offer guidelines or MLS reo instructions that I post on all of my reo listings, or by the agents actually doing some research and legwork for the clients/customers that they are representing, or going to the properties to see for themselves instead of asking the lister to describe the property or tell them about the home, the condition of the mechanicals, age of the roof, how much are taxes, etc.

I did hear about Teresa Gordon's REO seminar, someone contacted me from the REOMAC conference about her seminar, it costs several thousand dollars and as an reo agent I do not have that kind of money laying around for another conference, I spent several hundred on the REOMAC conference and I'm confident that it will eventually prove to be a wise investment.  

Many blessings to all for a wonderful holiday season and a Happy New Year!

I love this. I think I will print it as well as many of the comments. What part of 'as-is' don't they understand anyway?

Happy closings,

Chris