Posted by Becky IL on July 09, 2002 at 01:09:10:
Steph, the preapproval letter from a HM lender will suffice along with your earnest money.
Is this enough? - Posted by tampasteph
Posted by tampasteph on July 08, 2002 at 22:53:31:
I found several REOs that I would like to make offers on. I plan on flipping them to local investors.
Since the banks will not allow me to assign the contract (correct me if I’m wrong), I will have to do a simultaneous closing.
I have a pre-qual letter from a hml that my realtor will submit w/my offer.
Is this all I need, or are there any other hoops I have to jump through?
Any help is appreciated!
Thanks!
tampasteph
Re: Is this enough? - Posted by eric-fl
Posted by eric-fl on July 09, 2002 at 11:08:14:
Trust me, steph, if the banks have any specific requirements, they’ll be sure and let you know. REO sellers aren’t the least bit shy about making bidders (which, in essence you are on an REO) jump through hoops. In addition, if you don’t jump through those hoops just right, they may go so far as to reject your offer simply for not following procedures.
Generally, bank REO departments only work with a few Realtors. If your agent is one of them, and if they have done REO offers with these banks before, they should be well acquainted with them. Your best assurance is to ask your agent what additional items might be required, and if they unsure for any reason, for them to contact the bank.
It’s been a few years since I’ve bid on an REO, but if my memory serves me correctly, I remember signing off on some pretty ridiculous addenda at the time. I believe I even one time signed something to the effect of that I would not be able to retain my deposit even if the appraisal didn’t come back high enough! In effect, this removed the financing contingency, a fairly standard clause in most offers. It was because of these types of conditions that I eventually restricted my REO bidding to properties I would be willing to live in, after fixup. And even with that, I never wound up buying one, it seems there was always someone willing to pay more than me.
I don’t mean for any of that to discourage you, just want you to be aware of what you’re getting into. I believe the days when REO was a secret are gone, and the banks know it, and are running on the supply side of the equation.
Reo’s - Posted by Matt (MPD)
Posted by Matt (MPD) on July 09, 2002 at 05:24:26:
tampasteph,
I’m not a lawyer and you should probably consult a local attorney on this but from what i’ve done, if your purchase/sale contract does not SPECIFICALLY state that the contract may NOT be assigned then it can. The only exclusions to this rule that i’m aware of is personal service contracts or again, other contracts which specifically stipulate that they may not be assigned.
Now, that aside, your pre-qual letter may or may not be enough with that particular lender. It should be but they make their own rules when it comes to accepting offers. REO’s selling property are exactly like FSBO’s when it comes right down to it. They do not have to accept your offer and may have pretty strict criteria for acceptance. You’ll need to check with the listing agent for the particulars on the lender(s) that is/are offering those properties for sale. Each one of them could have unique differences as to how and from whom they’ll accept offers. In some cases I’ve dealt with lenders that will only accept electronic bids through a website, or only offers with proof of funds available, or any other such number of hoops that they feel obligated to make you jump through. Since you’re not speaking in specifics for any particular lender it’s impossible to say whether or not they will accept your offer based on a pre-qual letter from a hard money lender. They may not accept the lender as a qualified source, (similar to me having my cousin sign a pre-qual letter) and thus they may just throw your offer back as refused.
Talk with the listing agents and find out exactly what’s needed in each circumstance with each respective seller and go from there. Sorry I couldn’t be of more help but as I said, it’s impossible without specific lender information to say what they’ll accept.
Matt Yohnk
MPD Investments Inc.
myohnk@mpd-investments.com
REOs ? - Posted by Hank
Posted by Hank on July 08, 2002 at 23:27:09:
Get your own leads instead.
You know, the articles here tell you some about it.
Re: Reo’s - Posted by Rob FL
Posted by Rob FL on July 09, 2002 at 12:39:06:
95% of the REO sellers out there will require all contracts to be submitted with THEIR required addendum attached to it. This addendum will say things about an “as is” sale, a special warranty deed, a non-assignable contract, and a non-refundable e.m. deposit.
Re: REOs ? - Posted by tampasteph
Posted by tampasteph on July 09, 2002 at 24:01:59:
Hank,
I’m working on getting my own leads. I have been putting out bandit signs and fliers, have sent out postcards to fsbos and landlords, and have an ad in 3 papers. Nothing promising yet.
Making offers on REOs was just one other approach I thought I would try since I have finally found a realtor to work with me.
I just wanted to know if the pre-qual letter from a hard money lender would be enough for the bank to consider my offer, or if there was something else that I’m missing.
Re: REOs ? - Posted by Hank
Posted by Hank on July 09, 2002 at 09:05:46:
Didn’t mean to be a smart a_s w/my last post.
Just spoke w/a guy last night telling me about banks giving people a hard time about their letters from hard money lenders.
Dealing with REOs in this market is a very time consuming and frustrating endeavor.