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How to Present an REO Offer

When presenting an REO offer keep in mind that the seller is a financial institution, and not an individual. They are concerned with numbers, terms and ability to complete the transaction, all of which are submitted via secure website. This means that everything in your buyers’ offers must be specific and thoroughly completed.

The websites that are used to process REO offers will not even allow the offer to be submitted if any information is missing or incomplete. Having to go back to an interested buyer for missing information loses valuable time in the submission process and may even cause them to lose out on the property completely. The market is extremely competitive and the potential buyer who does not properly complete their offer could be passed over for one of the many offers that were properly submitted the first time.

One of the most important items is the pre-qualification letter or proof of funds. This lets the bank know that a reputable lending institution has examined the buyer’s credit and available funds and is willing to provide them with a mortgage, if necessary, to complete the purchase. Investors operating as an LLC should also have their Articles of Incorporation available. Time is money and the bank doesn’t intend to waste time on a buyer that cannot provide the necessary documentation to show that they have the ability to execute the transaction.

Be specific with closing dates. The computer only recognizes dates so the phrase “as soon as possible” cannot be used. This phrase is very vague as well. As soon as possible could mean a month to the buyer and a week to the bank. By keeping dates specific you avoid any possible misunderstanding. Also, be realistic about how much time you will need. Once a date is agreed on the bank will hold firm and penalties could result if the closing date is not met.

Be specific with any contributions towards closing costs included in your offer as well. Putting a percentage on a price that is still under negotiation leaves too much room for interpretation. By placing a dollar amount on closing costs, or any other area necessary, this allows your offer to be evaluated more efficiently and accurately.

Upon acceptance of an offer the computer system will generate an addendum making the acceptance official and transferring the file to the seller’s attorney. It is strongly suggested that the buyers have an attorney who is familiar with REO and Foreclosure procedures selected as early in the process as possible. An attorney who regularly works with REO and Foreclosed properties will be best qualified to protect the buyers’ interests and will be familiar with any potential issues that may arise. REO contracts are very stringent in terms of dates. It is standard that five days are given to a buyer from acceptance of their offer to execute contracts. This includes performing any necessary inspections on the property. If the contracts are not executed within five days the bank will most likely proceed to the next highest and best offer. Waiting to start looking for an attorney until after the offer is accepted could cost the buyer the property if they are unable to comply with the agreed upon timeframes.

Island Advantage Realty

Island Advantage Realty, LLC has established itself as an innovator and leader in the REO market throughout Metropolitan New York and Long Island. With 20 years of experience handling foreclosed and residential properties, you can rely on our knowledgeable team of agents to assist you with all of your Real Estate needs. Trust the experts. Trust Island Advantage.

Island Advantage Realty knows that your privacy is important to you.  That's why we want you to know that your information will never be sold or dissemination by us to anyone without your permission.

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