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How to get a discount on an REO?

By KILLERJANE   Follow   Mon, 9 Apr 2012, 5:54am   2,371 views   19 comments
In Burbank CA 91502   Watch (1)   Share   Quote   Permalink   Like   Dislike  

I recently was under contract for an REO that was very reasonably priced. The ROI was good, about 13%. I had a mold inspection performed and it came up with mold, a decent amount. The mold could easily be remediated and the Asset manager was willing to give the discount I asked for. I passed on it and got out of the deal because I found a better property with a little better ROI and better location.

MY QUESTION IS THIS: What are some other ways to get a discount on REO property during the inspection and contingency period? Thank you.

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1. Mobi Follow Befriend 1 threads 238 comments

   1   6:45am Mon 9 Apr 2012   Share   Quote   Permalink   Like   Dislike   I guess it depends on the market/area. In our place, your inspection contingent offer won't even get considered for a deeply discounted REO. And those houses are always sold AS-IS. The only thing I can do is to discount those possible fixes in my offer price. If they don't accept it, leave a note to let them call you when they are ready.

2. KILLERJANE Follow Befriend (3) 12 threads 600 comments

   2   8:54am Mon 9 Apr 2012   Share   Quote   Permalink   Like   Dislike   If I can get a discount for mold, there must be something else others have experienced?

3. KILLERJANE Follow Befriend (3) 12 threads 600 comments

   3   9:26am Mon 9 Apr 2012   Share   Quote   Permalink   Like   Dislike   Hello!!!! Calling all savvy reo buyers, please reply.

4. PockyClipsNow Follow Befriend 19 threads 1,534 comments Los Angeles, CA

   4   9:51am Mon 9 Apr 2012   Share   Quote   Permalink   Like   Dislike   try getting an 'aggressive' chimney inspection by a dedicated chimney inspector. try getting an 'aggressive' HVAC inpection by a dedicated HVAC inspector. Its best if the inspectors doing the inspecting also are making a bid to do the 'repair work'. Also do not forget drainage and slope issues (geology or whatever its called inspection). I sold a house and the buyers raked me over coals after a chimney/hvac inspection (i ended up giving them 10k off price, but they were 2006 buyers so joke is on them! ha!) Of course 'mold' is the first go to issue to try to get lowball accepted and/or get repair credit in escrow.

5. Mobi Follow Befriend 1 threads 238 comments

   5   12:22pm Mon 9 Apr 2012   Share   Quote   Permalink   Like   Dislike   It really depends on the price. If the price is well below average, they won't give a damn on inspection and will sell it AS-IS since they can always find another buyer. My suggestion is to low ball the property who sits on the market too long b/c listing price too high.

6. APOCALYPSEFUCK is Shostakovich Follow Befriend (28) 169 threads 4,153 comments Premium

   6   1:21pm Mon 9 Apr 2012   Share   Quote   Permalink   Like   Dislike   Protected   Run scans of lis pedens and foreclosures for the whole county for the past year by grantee - the lender who gets the mortgage's lien. Local well-run bank with a couple can weather them through. Bank with a lot of red ink ready to explode on its books may be more willing to talk to someone with cash. Track down the bank's REO officer and make friends and show him your bank balance. This is just a much more honest version of Realtors® flopping properties and screwing the banks outright. I know, it couldn't happen to a nicer crowd but still the REO officer would rather a property go and become a stable home again instead of a blight that neighbors point to and blame on the bank. And remember, when you settle direct, a fucking Realtor® starves to death in the dark, cursing you and the rats and homeless dogs eating his face.

7. BayArea Follow Befriend (3) 49 threads 368 comments Oakland, CA

   7   1:55pm Mon 9 Apr 2012   Share   Quote   Permalink   Like   Dislike   PockyClipsNow says (i ended up giving them 10k off price, but they were 2006 buyers so joke is on them! ha!) Cold blooded, lol

8. Shawn Follow Befriend 3 threads 106 comments San Diego, CA

   8   4:28pm Mon 9 Apr 2012   Share   Quote   Permalink   Like   Dislike   APOCALYPSEFUCK is Tony Manero says Run scans of lis pedens and foreclosures for the whole county for the past year by grantee - the lender who gets the mortgage's lien. Local well-run bank with a couple can weather them through. Bank with a lot of red ink ready to explode on its books may be more willing to talk to someone with cash. Track down the bank's REO officer and make friends and show him your bank balance. This is just a much more honest version of Realtors® flopping properties and screwing the banks outright. I know, it couldn't happen to a nicer crowd but still the REO officer would rather a property go and become a stable home again instead of a blight that neighbors point to and blame on the bank. I was going to ask if you were feeling ok, until: And remember, when you settle direct, a fucking Realtor® starves to death in the dark, cursing you and the rats and homeless dogs eating his face.

9. bighorse Follow Befriend 3 threads 104 comments San Jose, CA

   9   9:15pm Mon 9 Apr 2012   Share   Quote   Permalink   Like   Dislike   What is this bidding, then finding something wrong? You're supposed to bid assuming things are broken. It's bidding against people like you that jacks the prices up.

10. 1sfrenter Follow Befriend (1) 11 threads 224 comments San Francisco, CA

    10   9:58pm Mon 9 Apr 2012   Share   Quote   Permalink   Like   Dislike   APOCALYPSEFUCK is Tony Manero says Track down the bank's REO officer How do you do this? Let's say I find a vacant REO and I know which bank owns it but it is not listed. How do I find the right person at that bank who knows about that particular property? No one seems to be able to answer this question....

11. APOCALYPSEFUCK is Shostakovich Follow Befriend (28) 169 threads 4,153 comments Premium

    11   12:11am Tue 10 Apr 2012   Share   Quote   Permalink   Like   Dislike   Protected   Same way reporters and bill collectors do: samurai telephony. You might contact the lawyer of record in the filings at the registry and ask who you should contact at the bank or what named department would be managing the REO. 1sfrenter says APOCALYPSEFUCK is Tony Manero says Track down the bank's REO officer How do you do this? Let's say I find a vacant REO and I know which bank owns it but it is not listed. How do I find the right person at that bank who knows about that particular property? No one seems to be able to answer this question....

12. KILLERJANE Follow Befriend (3) 12 threads 600 comments

    12   1:02am Tue 10 Apr 2012   Share   Quote   Permalink   Like   Dislike   bighorse says What is this bidding, then finding something wrong? You're supposed to bid assuming things are broken. It's bidding against people like you that jacks the prices up. Well, every buyer for their own. The bank asks for highest and best. I am trying to get a good deal even better if the market drops a bit more. Since you have to be on top to win the contract to buy, why not try to get it marked back down a bit? If you know of any ideas please add them here.

13. KILLERJANE Follow Befriend (3) 12 threads 600 comments

    13   1:08am Tue 10 Apr 2012   Share   Quote   Permalink   Like   Dislike   ptiemann says Bidding "high" and afterwards negotiating down for "defects" will get you a reputation. That doesn't matter much. I am working with whomever can actually help get me the property. I am not really a 'big investor'. Just trying to negotiate the best deal I can. My money will only stretch so far so I was hoping anyone who had experience negotiating during inspection of REO could give me the inside trickery.

14. KILLERJANE Follow Befriend (3) 12 threads 600 comments

    14   1:13am Tue 10 Apr 2012   Share   Quote   Permalink   Like   Dislike   APOCALYPSEFUCK is Tony Manero says And remember, when you settle direct, a fucking Realtor® starves to death in the dark, cursing you and the rats and homeless dogs eating his face. Do you regularly take your doggy to open houses for supper?

15. APOCALYPSEFUCK is Shostakovich Follow Befriend (28) 169 threads 4,153 comments Premium

    15   1:21am Tue 10 Apr 2012   Share   Quote   Permalink   Like (1)   Dislike   Protected   Fluffycakes gets a standing O whenever he starts chewing the Realtor®'s face. KILLERJANE says APOCALYPSEFUCK is Tony Manero says And remember, when you settle direct, a fucking Realtor® starves to death in the dark, cursing you and the rats and homeless dogs eating his face. Do you regularly take your doggy to open houses for supper? Thinking saying and doing need to line up.

16. KILLERJANE Follow Befriend (3) 12 threads 600 comments

    16   8:41am Tue 10 Apr 2012   Share   Quote   Permalink   Like   Dislike   Maybe you had the better offer because you could actually get the dough. Or maybe he dropped out or was fictitious. Banks want as much as they can get.

17. bubblesitter Follow Befriend (5) 10 threads 2,329 comments

    17   11:53am Tue 10 Apr 2012   Share   Quote   Permalink   Like   Dislike (1)   APOCALYPSEFUCK is Tony Manero says Fluffycakes gets a standing O whenever he starts chewing the Realtor®'s face. It's snack time,fluffy!!

18. BayArea Follow Befriend (3) 49 threads 368 comments Oakland, CA

    18   2:20pm Tue 10 Apr 2012   Share   Quote   Permalink   Like   Dislike   ptiemann says Bidding "high" and afterwards negotiating down for "defects" will get you a reputation. You may be successful with this tactic once, if you are lucky. Chances are, the bank had multiple offers and once you ask for credits, they just sell to the next guy. At least in Santa Clara you won't be able to buy repeatedly from the same agent if you are known to negotiate after going in contract. Interesting. I know that this "tactic" of bidding high to get in the door and negotiating down has become common practice on REO's these days. In the past 4 months I've bid above asking price several times only to be beat out, and this could be a very good reason why... And when the final sale numbers are released to the public, I am discovering that my offer was actually higher. This could be because of the tactic, a higher downpayment despite lower overall offer, or familiarity with the buyer or buyer's representatives. Despite a down market, it's still not easy to acquire sometimes... If you are not playing the game are you getting left behind?

19. APOCALYPSEFUCK is Shostakovich Follow Befriend (28) 169 threads 4,153 comments Premium

    19   3:30pm Tue 10 Apr 2012   Share   Quote   Permalink   Like   Dislike   Protected   hehehehehehe! Eat hearty, Fluffycakes, eat hearty! bubblesitter says APOCALYPSEFUCK is Tony Manero says Fluffycakes gets a standing O whenever he starts chewing the Realtor®'s face. It's snack time,fluffy!!