I was just on a panel this morning with an REO Assett manager from Wacovia bank. Let me share some of the ideas that he and I gave to the attendees:
- If you can, always talk with the listing agent before you write an offer. Each bank has its own quirks, so you need to know what they expect, othewise they many not even consider your offer, especially if multiples.
- Not always a good idea to be first with an offer. The bank, like most sellers, thinks that it is listed too low and hopes to get more ...so they might shop your offer
- Understand that you are going to be getting an addendum to any offer you present. It might be 4-8 pages long and takes away (or limits) many of the protection clauses that are included in most purchase contracts. So, why not deal with that BEFORE you write the offer. If you buy can't handle "as is" with no disclosures, a 30 day close, a 10 day contingency period, a $100 penalty for closing late or any of the other provisions of this Addendum, don't even write the offer
- Try to get copies of the lender's addendum and the other documents that need to be signed BEFORE you write the offer. If you can't get them from the listing agent, most lenders have them posted online. Can you imagine how your offer will look if you present them with the contract and all their documens signed with the offer.
- The #1 criteria for chosing the right offer is will it close. And, their most fear is lender issues. So, there are a couple of things you can do:
- If you are not pre-approved, don't waste your time
- Apply for the new loan at their bank. May not help but may give your buyer an advantage. Countywide is requiring it on their sales
- If you use a broker, get a letter from the actual lender, not the mortgage broker. It should state that the buyer is apporved and what conditions exist for approval. If the conditions are burdensome, it might knock your buyer out.
- When in doubt, go conventional. Lenders know that FHA and gov't loans can take longer
- Many banks are posting their REO sales online.
- Lastly, for listing agents. Each bank has their own forms and rules for offers. If you haven't done so, write up a one page flyer titled, "How to get your offer accepted by ____ bank." The flyer should tell them how to write the offer, what deposit you expect, contingency timeframes, how long to close, any repairs allowed, title company used, how long to get acceptance, etc, etc. then post this, along with any forms that Bank will be requiring the buyer to sign online. Then, in your Remarks on MLS, give them the website where this info can be found.