For the past year and a half all except for one of my transactions has been REO.  I have learned a lot from listing agents and other experts regarding how REO sellers view offers. I also review the contracts of other agents in or office as the Contract Compliance Manager. 

What most agents do not seem to realize is that you can still ask for repairs or replacements on an REO property.  When a REO listing says no repairs they are generally talked about the fact that they are not going to replace the flooring or cabinets.  Don't ask them to paint.  BUT they will make repairs or replace items involving the major systems or structure of the home.  They are especially generous with owner occupants. 

So today I reviewed about 7 contracts and noone asked for anything, except for stuff they had already been given a right to do in the contract.  Such as, "All parties agree buyer shall have a right to inspect the property". 

Here are some things I commonly ask for and obtain for my buyer 9 out of 10 times.

A one year Termite Bond (worth $500 - $900)

A one year Home Warranty

A new compressor if the old one is missing, which it usually is.  I also ask that the HVAC is in good working condition. 

I always recommend that my buyers get a good home inspection before the due dilligence period has ended.  They usually do this asap after verbal acceptance. When the home inspection reveals some serious problems, and the buyer wants to continue with the transaction, but no at the agreed upon price, I put together an amendment to address concerns.    In this amendment I state the item or items that have been revealed that cause the buyers to re-access the value of the home such as stair well that is bowing indicating structural issues or in the case of a termite inspection, a wall or walls that are eaten up with termites. Other examples might a slipping foundation or cracks in the foundation.  I always add a stipulation at the bottom that if the seller does not agree to the reduced price, the Purchase and Sales Agreement or Contract will terminate.  That always gets their attention.

What has your experience been with REOs?