Posted by Allen Bailey on March 24, 2008 at 16:46:39:
It doesn’t matter what contract you use or what you put in the contract. The bank is going to require that you sign addendums that essentially will take away any assignment and a lot of other things you would like as well. A lot of these will say that if they get a higher offer then they can cancel the contract at any time.
We have represented many buyers with REO properties and it is always interesting to see what crazy thing the banks will come up with next. I just had to cancel a listing for a REO as the bank wanted me to put something in the Realtor comments that is against MLS rules and I need the MLS more than that bank.
So the only rule with REO’s is the golden rule. He with the gold (banks) makes the rules.
you should be using the standard Realtor contract when making offers on REO’s(requesting to use your own contract because it is assignable is unproffessional and you should not do it.) the “and or assigns”
language will be crossed out as banks will not allow assignments, HOWEVER… the most common way around this is through a simultaneous closing but not all title companies will do this, you have to find an investor friendly title company. Talk to hard money lenders and ask about title companies they prefer doing business with.
and finally, James mentioned having to have proof of funds before making offers on REO’s…there is a loophole on that one also. Have a hard money lender/private lender write you a prequalification letter to be submitted with all your offers.