Securing a Good Deal on an REO (Bank Owned Property)

The news this morning reported that the iminent release of REO's will flood an already saturated market with more inventory.

It seems banks are not really all that interested in holding property, which it took them a while to figure out. I guess they didnt expect people to want a DEAL on an REO, not to pay market value. They also arent really all that keen on forgiving principal balances to keep people in their homes, despite some folks best efforts to gain homeowner assistance.

So we will likely see more bank owned properties, and in accordance with the law of supply and demand, they should be well priced. This is it folks - an unprecendented time in history to pick up your Sarasota vacation, beach, retirement home for a song.

Dealing with banks is different than traditional sellers of Sarasota real estate. If you are going to pursue a bank REO, here are some tips:

1) Cash is king and will put your offer on the top of the pile, ahead of other similar offers
2) If you will finance, have your financing in line and documented by your lender at the time of offer
3) The bank will not generally maintain the home nor fix deficiencies. Do not put clauses in your offer that will require them to do either - instead write an offer "as is" with right to inspect. If the inspection reveals a major issue, you can back out
4) Be ready to close quickly. The bank is motivated by serious and ready buyers
5) Hire a lawyer to review the documents. Banks utilize their own contracts and addendums that may not be familiar to your real estate agent. The bank will have a host of lawyers representing them - it is well worth a few hundred dollars to be protected.

REOs can present an excellent opportunity to buy into a neighborhood you might not otherwise be able to afford. But keep in mind you are not dealing with a personal seller; instead we are negotiating with a corporate entity. Aligning your expectations to that reality will make the process more palatable and rewarding.