Bank Owned Real Estate Negotiation Tips: What You Need To Know When Dealing With Banks

You just visited the REO property and you want to own it. How do you negotiate with the bank to get that REO in your hands?

Understand the objectives of the bank.

First of all, you need to understand the bank. He will try to recover the money he spent on the property, which will be the unpaid loan from the previous owner; costs related to foreclosure; and other costs to make the property marketable, such as lien clearance, cleaning, and cosmetic repairs.

So make a reasonable offer based on the market value, the condition of the property and how much you can afford. And since your own goal is to buy the property below market value; you need to have an agent who can help you list the property before the bank incurs additional fees that will increase the sale price of the REO property.

Additionally, how much you can negotiate also depends on the financial condition of the specific bank that owns the specific REO property and the scale of your REO inventory.

Next, learn what deals would look good for the bank that owns the REO property.

Cash offers are best, and next is a loan pre-approval that proves you’re a serious REO buyer and have the money to close the sale.

Also, banks prefer clean offers; have quick escrows of around 21 days; and that they are interested in buying the property “as is” after the due diligence inspection has been carried out.

Finally, although banks have general offer preferences, it is best to work with an REO buying agent who knows from experience the specific criteria the bank uses when considering offers for a specific type of property.