Upcoming Foreclosures

Anyone have experience with REO foreclosures?

How negotiable are the banks? How tough is it? Would you recommend it? We came across one by accident.. not sure if it's a hassle or not. Thanks!! Is there an industry standard regarding the lowest price the banks are willing to accept? Would they take 15% less than asking if its been on the market for a few months? Any tips on how to get them to accept a lower offer?

Public Comments

1. It should not be a hassle at all... We have a REO department here and are just as eager to get rid of the properties.. the market is horrible.
2. If you REALLY REALLY like/want the house make an offer. But expect the banks to usually drag their feet, reject a lower offer and promise NOTHING, no repairs, no guarantees of anything. But like anything if you LOVE it, work for it and be patient and cross your fingers and eyes. Reo is a bank owned property that didn't sell at auction so the bank has it back on the market. Offer what they ask and hope for the best, like no major problems, and don't hold your breath on them hurrying and anything.
3. Buying an REO property is not much different than buying any other property except that you do not get the normal owner disclosures. The key is to have a good real estate agent acting for you.
4. My husband and I have been trying to buy a house for the last 7 months in California, focusing mostly on REO's because, aside from short sales, that's all there is. I think your question partially depends on where you're looking to buy. It has been an utter nightmare for my hubby and I because there are more buyers for the REO's (in the area we're looking) than there are REOs. To date, we have submitted 27 full price offers. We are cash buyers and can close escrow in 14 days or less and still have only come close on 1 home. That being said, I think in the right market, an REO is not a bad opportunity. It may take a bit longer to hear back from the bank than it would from a regular seller, but it isn't any more difficult. Just stay away from the short sales. Also, while the banks will negotiate, all properties are usually "as is" and they will not make repairs. ADD - the asset managers do their homework. Check out the comps in the neighborhood and offer accordingly. 15% is pretty low especially if you are loan dependent. If the home is listed lower than the comps, the banks aren't likely to lower their price regardless of how long it's been on the market. Again, this all depends on where you are looking to purchase.
5. It's a hassle, but how much hassle would you be willing to put up with in order to save thousands and thousands of dollars? There's no industry standard... it really depends a lot on the situation is: How much was owed on the house, arrearages, etc. Also, it depends on how much the bank is motivated to sell the property. If they are at the end of their fiscal cycle, they will be more motivated to get the home off the books. Get a good realtor to find out a comp for the property. Then offer 50% of the fair market value. They won't accept, but it is a good starting point. Be prepared for the bank to insist you take it "as is". Do a title search on the property to make sure there aren't any liens. And finally, make sure that any deals are subject to a thorough inspection by an expert.