Avoid the inevitable frustration and stress so many real estate agents and buyers are currently experiencing by educating yourself about the REO (Real Estate Owned) buying process! 

Here are 10 REO Tips to help you get your offers accepted and closed:

1. Choose a real estate professional who Knows the Market and Understands the Bank-Owned Home Sale Process.
   • Completes a thorough comparative market analysis on the subject property prior to writing the offer. 
   • Look for trends - is the market steady, declining? 
   • Look at the last 2-3 months solds as well as the current pending sales. Many banks are using a tactic that results in a lot of activity and multiple offers.  They get two appraisal values (market and liquidation).  Then they have the REO listing agent list the property at the lower appraised value which attracts multiple offers and ultimately drives the final sales price up and sometimes over the market value.
2. Verify availability and multiple offers.  Obviously it is important to determine whether or not the property is still available or if there are multiple offers before writing the offer.   We will gather all this information for you so you can make an informed decision regarding writing and submitting an offer topurchase.
3. The actual offer package.  Believe it or not, many offers submitted by agents are illegible!  We use online formsand ensure your offer is complete and spells out in clear, concise language the terms and closing costs. 
4. Seller concessions and closing costs.  We encourage our buyer to write his/her best offer first.  It really is all about the final net to the bank.  If you are requesting closing costs, realize that you may be competing with multiple offers and may need to write an at list price or above offer.  Some banks are only willing to pay certain closing costs and are countering with the buyer to pay for what would normally be considered customary seller costs - In Nevada - transfer tax, CIC fees, title insurance, for example.
5. Inspections and repair costs.  Write the offer with a reasonable due diligence period (5-7 days but no more than 10 days).  The bank may limit or counter repair costs.  We recommend including this clause or something to the same effect:  "Seller to make, at their expense , any lender-required repairs as a result of the inspection or appraisal."
6. Earnest money.  As the buyer, be prepared to write the EM check for at least what is requested in the MLS.  Ensure you have a current (not stale-dated) check if you have been writing a lot of offers and in the REO game for a while.
7. Buyer Pre-Approved for Financing.  Pre-Approval (not pre-qualification) of the buyer is a must and a proof of funds letter can also strengthen your offer.  
8. Seller/Bank addendum.  REO Properties are sold as-is, no warranties or guarantees.  You may be able to get the seller to pay for a home warranty - it depends on all other concessions, costs and net to the bank.  We are finding many banks will not complete disclosures required by Nevada statutes:  Seller's Real Property Disclosure for example.  We carefully review all of this with you and other language in the bank's addendum to the purchase agreement.   
9. Time frames.  Allow a minimum of 1 to 2 weeks to hear back from the listing agent regarding a response from the bank.  If the bank accepts your offer, expect that you may only receive a verbal or email counter and/or acceptance subject to the buyer executing the bank's addendum and accepting any other terms.  Once wehave approval, we will open up the escrow and get the buyer going on their due diligence.  Also be prepared for a closing time frame of 45-60 days or more depending on whether or not there are any issues to deal with like liens, judgments, or other clouds on title.
10. Communication.  Saving the best for last!  Here is where everyone's patience, tenacity, positive attitude, communication skills, and knowledge of the REO process will come into play.   Communication, or rather the lack there of, is the biggest complaint and issue of everyone diving into the REO market.  

OK , so here is the reality of "what is"  concerning the current real estate foreclosure market...

• Some REO agents are overwhelmed and  trying to break the code on keeping up with the tasks and necessary communication
• Some of the seasoned REO veterans are experts on the process and working diligently to improve and expand their services as their business has grown exponentially
• Still other REO agents have broken the code and have excellent systems in place to handle all the additional tasks and requirements for success
• Many agents are aggressively trying to break into the REO market and may be relatively inexperienced - learning as they go or on their first batch of REO listings
• Many buyers agents are not educated to the process and may be writing their first REO deal with an agent who may or may not understand the process themselves
• The banks & asset managers are also overwhelmed and trying to figure out how to handle the out-of-control workload

Bottom line ...

It is critical to work with buyer's agents who specialize in the REO/Foreclosure process and can educate and navigate you through the sometimes rough waters of the foreclosure sale.  Let the team at las Vegas Foreclosure Connection help you with your next Las Vegas Home purchase.

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