5 Tried-and-True Tips on Buying REO's
A lot of home buyers are interested in wading into the Realtor marketplace, but don't know where to start. Without the inside scoop on Realtor's it can be a tough market to crack into for a beginner. Many of the Internet buying success stories are usually a combination of years of real estate experience combined with a little good luck.
For a beginner this is no reason to get discouraged. There are plenty of REO's out there and even the most seasoned investors don't know where to locate many of them. Here are 5 tried and true tips to help you find success in REO buying:
For a beginner this is no reason to get discouraged. There are plenty of REO's out there and even the most seasoned investors don't know where to locate many of them. Here are 5 tried and true tips to help you find success in REO buying:
Find out where the REO's are: The Internet is full of "experts" who claim to have the inside track on REO's. Most agents will limit their property search to the MLS and end up missing thousands of great deals. The secret about finding REO's is just going directly to the banks. Most banks in the US will publish their REO listings in an easy to search format on line. A list of large banks can be found here: RepoFinder.com/REOfinder, or if you prefer to search smaller banks and credit unions a list of those is located here: RepoFinder.com. You can also find a Realtor in your area that specializes in REO buying. Ask a lot of questions and make sure you are dealing with with someone that can help you find the very best deals. Gain this person's confidence, and you will reap the rewards. If you live within 100 miles of a major city, there should be REO agents who handle your area.
Remember that banks are also REO experts: Banks don't arbitrarily throw a price out there on REO's. They've already done their due diligence and on the property and know that for every REO there are plenty of buyers out there. Most banks have quite a bit of wiggle room, but you need to be realistic. If you can inspect the property with an expert, be sure to make a list of reasons to justify your low-ball offer.
Relax:The banks don't want the properties on their books, but there is quite a process in discounting property and moving it off their books. These are bankers you're dealing with not real estate agents. They want to make a deal to, but you need to be patient with their turn times.
Less is more: The bank doesn't want to jump through hoops to try and appease all of your demands. The fewer strings attached to your offer, the more likely you'll see an acceptance.
Make sure you're 100% qualified: Cash buyers always win here, but if you must finance make sure all of your paperwork is in and your completely qualified. Remember that banks are in the lending business and they are going to be extra vigilant. Have you provided updated income statements to your lender? Has your income or debt-to-income ration changed? Stay on top of this so that you're ready to pounce when you land a good deal that wants to close fast.
These are just a few tips to help you start. Ask a lot of questions and be don't get discouraged if your first few deals don't work out. The real key is finding the right property that's good for you.
Remember that banks are also REO experts: Banks don't arbitrarily throw a price out there on REO's. They've already done their due diligence and on the property and know that for every REO there are plenty of buyers out there. Most banks have quite a bit of wiggle room, but you need to be realistic. If you can inspect the property with an expert, be sure to make a list of reasons to justify your low-ball offer.
Relax:The banks don't want the properties on their books, but there is quite a process in discounting property and moving it off their books. These are bankers you're dealing with not real estate agents. They want to make a deal to, but you need to be patient with their turn times.
Less is more: The bank doesn't want to jump through hoops to try and appease all of your demands. The fewer strings attached to your offer, the more likely you'll see an acceptance.
Make sure you're 100% qualified: Cash buyers always win here, but if you must finance make sure all of your paperwork is in and your completely qualified. Remember that banks are in the lending business and they are going to be extra vigilant. Have you provided updated income statements to your lender? Has your income or debt-to-income ration changed? Stay on top of this so that you're ready to pounce when you land a good deal that wants to close fast.
These are just a few tips to help you start. Ask a lot of questions and be don't get discouraged if your first few deals don't work out. The real key is finding the right property that's good for you.
