How To Get Your REO Offers Accepted When Buying Houses

Due to the real estate meltdown, most banks have ended up with more properties in their hands than they can handle. They have more houses for sale than anyone else, but the market has few buyers.

Making offers that these banks accept is therefore important whether you are a real estate investor or a regular home buyer.

Follow these tips to successfully buy REO properties cheap.

1) Get pre-qualified
When you are buying a property from a bank, you must first be pre-qualified, or show proof of cash.

The bank will not consider your offer until you get this, so this should be your first step.

2) Get a good real estate agent
Most bank owned properties are listed in the MLS by a real estate agent. You must therefore make any offer through the Realtor.

You must therefore get a good buyers agent to work for you.

3) Do your due diligence
Most bank owned properties need little to no repair. A good repair estimate is a must when buying these properties. This will be helpful to negotiate a better price.

Some conservative comps will be necessary to negotiate a lower price.

4) Order an inspection
You must get this when buying bank owned property. Banks don't like to fix houses, but will give you a discount for repairs.

Make sure your real estate contract has inspection verbage to get you covered.

Most likely, you will discover problems you were not aware of from the inspection. These will help you further negotiate a lower price.

Banks will reject your offer if you require them to fix the property. Your buying terms should be as is where is. Ensure your contract shows this. They will offer discounts based on needed repairs.

5) Other costs
If there is a home owners association, make sure dues are fully paid up, and prorated at closing. Fees and fines are common in foreclosure properties.

You should have these costs credited at closing.

Also make sure all taxes are paid. Make sure you get a prorated credit at closing.

Most importantly, make sure utility bills are fully paid up; you do not want to get stuck with previous bills. Make sure these are cleared.

6) Make offers lower than the asking price
Banks are willing to negotiate. Always make an offer lower than the asking price. Properties that have been sitting in the market for a while will be more discounted.

In general avoid making more than 10% lower than the asking price. And if your offer is not accepted, you can make a higher offer depending on the bank's counter offer.

In order to run a successful real estate investing business, it is necessary to increase efficiency so you close more deals using less time, money and effort. Learn how you can automate real estate investing business from an interactive real estate investor website.