4 Guaranteed Tips to Win REO Foreclosure Offers

REO or real estate owned are the properties that are foreclosed by the banks and belong to their roster. Since they are sold as-is, they are usually underpriced.

REO properties are under constant radar of the ‘savvy’ buyers. Since banks receive multiple offers, the listing expires within a few weeks.

If you are looking to buy an REO property, you will need a few strategies to win the offer. Here’s a break down of 5 guaranteed tips to buy your next home -

1. Learn property history

REO properties do not have a clean history. In order to avoid bad purchases, it is important to dig deeper.

Learn about the property price which is available on the Sheriff’s Deed or Trustee’s Deed. Compare that price to the asking price.

The bank will accept the offer somewhere between the outstanding mortgage balance and the foreclosure sales price.

2. Identify comparable sales

The listing price has little to no significance during a real estate transaction. You should target the market value while making an offer.

However, competing buyers offer more than the listing price. Nevertheless, you can take a look at the comparable sales for the last three months.

Check out active listings to formulate the prices of the houses.

3. Analyze listing agents

REO agents generally either work independently or with 1-2 banks. They work with more than one client and hence offer the same pricing.

You can ask your buyer’s agent to search the listing agent in MLS. You can also check the agent’s listing in the last three to six months. Also, determine the list price to sale price ratio.

4. Know the number of offers received

When the REO property has no offer, you can offer less than the list price and get your offer accepted.

If there are more than 2 offers, you may need to offer above the listing price.

If the property has more than 20+ offers, it may be all cash. If you are seeking a mortgage loan, you may need to increase the price.