Foreclosure University Foreclosure

Working Directly with REO Listing Agents

March 8th, 2016 by Jarad

Working with REO Listing Agents

Like previously mentioned, working with REO listing agents is a big deal. The best situation is to find a lock box on the door with no “For Sale” sign.

Listing AgentThis is a good indication that the home is vacant and the listing is still pending. There is no “For Sale” sign yet because the REO listing agent doesn’t have the listing yet.

So you have a few weeks, while the property is in transition, to contact the REO listing agent, and let them know you are interested in making an offer.

Now, before you call the listing agent, you need to make sure you know what the value of the property is and what you are willing to offer.

I will go through all this later…

When you call the REO Listing Agent, they may or may not know what the banks asking price is. If they do, you’d better be ready to make your offer which means you need to know “how much” the property is worth. Let’s discuss how this is done in more detail.

When you find a property with a lock box and no “FOR SALE” sign, the first thing you need to do is research. You need to know who owns the property and what it’s worth so you know what to offer.

Don’t worry, we’ll get into determining value, estimating repairs, and what to offer a little bit later. Just know these must be done before you call the REO listing agent.

One of the first things you need to do is find out who owns the property, so you can find out who the REO listing agent is. To find out what bank owns the property, you need to work backwards.

Start with the county records online. Try to do an address search first and see if you can identify what bank owns it.

If that doesn’t work, talk to neighbors and get names of the previous homeowners so you can do a name search, or so you can just call them up and ask them.

Knowing who the lending institution is will help you narrow down who the REO listing agent might be. This is critical in this whole process because you are eliminating competition.

If you still can’t find out who the lending institution is, you may have to do a skip trace to find the homeowner so you can ask.

Once you’ve identified who the lender is, a lot of time you can find the listing agent because they work with the same people all the time.

You need to contact them and let them know you are interested in purchasing the property. You also need to sound confident that you know what you are doing.

REO listing agent script

Here’s a sample script you can follow …

Hey [REO Listing Agent Name], this is [Your Name] – I’m calling about the house on [street address of property]. It’s my understanding you are the REO Listing Agent, and [Foreclosing Lender] ask that I contact you directly. Is this a good time?
Great! First, I want you to know that I’ve seen the property and really like it. Do you know what the bank is asking for it? (usually they will say “No” because they don’t have the listing yet. If they do, be ready to act immediately.)
Ok, I’m in the market for a property just like this. I have all cash, I can close when the lender is ready, and there are no other agents involved. So I’d be working with you directly on this. Is that ok? (they will say “YES” every time. They want both sides of the commission.)

When you get the listing agreement, would you mind calling me and allowing me to make an offer on it before it goes in the MLS?
Great. To make this easy, I’ll send you an email with my contact information. What is your email address? (By doing this, you’re also getting their email address so you can follow up with them, and you also have it for future reference if you come across another property with the same lender.)

Feel free to modify this script anyway you wish. The main points here are to make sure they know you have all cash, can close quickly, and they are getting 2 commissions, both buyer and listing side, so it’s a huge incentive for them to give you first crack at it.

In some cases, REO listing agents may already have investors like you that they already have relationships with.

If you want to get in the game, you have to prove to them you are a legitimate player. You may have to purchase a few from the MLS first before they realize you are serious.

So don’t be surprised if they don’t respond to you or give you the cold shoulder when you initially contact them. Don’t give up either.

There are a few things you can do to make your offer more appealing. Many times buyers will have contingencies in their purchase agreements like, contingent upon financing, contingent upon home inspection, etc.

If you want the bank to accept your offer, you need to show them you are serious and want to help them get this property out of their inventory so they don’t put it in the MLS.

If you want this property you should have an all cash offer, no contingencies, and can close very quickly (2 to 3 weeks).

This does not mean they will accept your offer every time, however, it sure is more appealing and persuasive.

How To Make All Cash Offers

So how are you able to make all cash offers? Simple. With Transactional Funding from us. We provide transactional funding for our students and charge no fee’s.

No closing costs, no processing fee’s, no holding fee’s, no wire fee’s, no nothing… and we provide unlimited proof of funds letters.

What’s the catch?

Well, you need to have an end buyer in place (which is not hard as long as you do it right), they need to be a cash buyer and it can’t exceed $600,000 which is not hard because you’re focusing on starter homes.

There is a membership fee. You have to be a member. I explain it all in this 30 minute video.

Or if you don’t want to use us, you can find a few others that do transactional funding or you can get private money. When you do the math, I’m sure you’ll be back to use our funds 😉

Once the REO listing agent calls you back and tells you what the bank is asking, you need to be ready to send them your offer.

At this point, you’ve already done all your research and know exactly what you should offer. As long as it fits your buying criteria, make the offer along with your proof of funds letter.

If the REO Listing Agent decides to list the property in the MLS instead, call up a different agent (one that you have worked with in the past) and make the offer through them.

You should know the maximum amount you can offer and still make a profit as long as you follow the formula which I will discuss later.

Do not get greedy when you do this. If you can profit anywhere from $10,000 – $15,000 on every deal, you should be happy. There will be times when one may fall in your lap where you get a nice paycheck, however, let’s be realistic and focus on the formulas. The profits will come naturally when you stick to the formula.

Please let me know if you have any questions or comments about this process.



How Do I Know If This Property Is A Good Deal Or Not?

October 3rd, 2014 by Jarad

Is it a good deal?One of the most common questions I get a lot is “How Do I Know If This Property Is A Good Deal Or Not?” In fact, a gentleman this week asked me this same question… He said, “you are absolutely right when you say that people fail in real estate…its because they are afraid they wont be able to sell the house later… I am one of them. I have come across more than one opportunity to buy houses and I do not take them for that specific reason. Another reason that keeps me from making offers is trying to figure it out if its a good buy or not… how do I know if it’s a good deal? Will I be able to rent it if I decide to hold it?

I would like to spend some time explaining to those who might be having the same challenges and hopefully shed some light on the situation so anyone can gain more confidence making more offers, because ultimately, that’s the only way you are going to make any money. […read more]



Buying Distressed Properties For Pennies

September 11th, 2013 by Jarad

Buying Distressed Properties For Pennies

A few days ago, I sent an email out regarding buying distressed properties.  I wanted to show you a quick glimpse of some of the deals we are seeing and doing.  I show you these numbers not to brag, but so you can see what kind of opportunity is out there in the marketplace.  And you’ll see that you don’t have to have a lot of money to turn a quick profit and quadruple your investment.

Over the past 2 years, we’ve been using this strategy to buy and sell distressed properties.  We’ve bought and sold over 500 properties this way and with what we are seeing, there are no signs of slowing down any time soon.

Here are some of the properties we’ve sold recently… […read more]



Should I Foreclose or Short Sale

August 2nd, 2013 by Jarad

Should I Foreclose or Short Sale My Home?

Should I foreclose or short saleQuestion:  Should I foreclose or short sale. Here is the situation. I bought a condo in Tampa, Florida in September 2005. This was my first real estate purchase and my primary residence until I transferred to Maryland for my job in July 2008. I have a first mortgage for $150k and a HELOC for $25k. The property has been short sale approved and there is a buyer that is going to purchase it for the price of $60k. We are ready to close but I need to pay all the delinquent HOA fees, late fees and attorney fees that have mounted up. I can not afford to pay the $3000 in late HOA fees to close on the short sale. Now, I am facing foreclosure. I have asked the HOA to waive the late fees and attorney fees so I can do a short sale but they are refusing.

Is it worth it to borrow the money from friends and family or should I foreclose or short sale?
Thank you,

Natasha
[…read more]



Short Sale vs Foreclosure

March 8th, 2013 by Jarad

short sale vs foreclosureQuestion:  Help me understand the difference between a short sale vs foreclosure. I bought a condo in Tampa, Florida in September 2005. This was my first real estate purchase and my primary residence until I transferred to Maryland for my job in July 2008. I have a first mortgage for $150k and a HELOC for $25k. The property has been short sale approved and there is a buyer that is going to purchase it for the listed price of $60k. We are ready to close but I need to pay all the delinquent HOA fees, late fees and attorney fees that have mounted up. I can not afford to pay the $3000 in late HOA fees to close on the short sale. Now, I am facing foreclosure. I have asked the HOA to waive the late fees and attorney fees so I can do a short sale but they are refusing. Is it worth it to borrow the money from friends and family so I can do a short sale, or should I just let the condo go into foreclosure?

Thank you,

Natasha

Answer:  -This is a common question that gets asked a lot about the difference between a short sale vs foreclosure. While both are damaging to your credit, a short sale is a much better option – and here’s why… […read more]



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