So many questions, so little time (due to my goals) so I thought I would turn to my DG family:
I know I get long-winded, so if you find that you know the answer to even one of these questions, please don't be overwhelmed by my post. Any input would be AWESOME!
--I have called an asset manager at a bank directly.
--He has properties that are not listed with agents.
--I have picked up keys to two properties and gone to see them with rehab guy who has given me estimates
--I have run the numbers, and I'm ready to make offers on both properties
--I am not using an agent, nor are these listed with agent, so I am making an offer myself in email directly to the asset manager
--Initially, I was going to just type up my "price offered" and my terms within an email (without a formal contract). But I have been advised it may be better to send a formal offer contract. This true?
--If this is the case, my personal experience leads me to only have a simple contract on file that is only one page, not a standard 5-6 page contract. Not a biggie, I can go out there and find a standard contract and have done so. This leads to more questions, as offering on an REO is different than FSBO or any other property...
For instance - I have learned that:
--Bank owned properties do not need a title search because legally a bank cannot sell you a property with a lien on it. Is this true? (not sure I am right, but have heard not to pay for a title search when a bank should ensure this ---so maybe I just have a phrase in my contract that ensures the bank is selling me a property free of liens and encumbrances, yes?) In other words, this title search part will be left out of my contract entirely since it won't be necessary (as I understand it).
--Need to add earnest money phrase of earnest money is $1000 due 14 days after contract is signed by bank (in order for me to get money from my buyer) (per Freeindeed's process which is awesome)
--Need to somehow have terms that allow me to access of keys of property when needed prior to closing for consultants etc... (basically to walk my buyers through)
--Of the "form" contracts I have on file ...some mention mortgages, etc...and this won't be a situation where I need that...not sure if I just take that stuff out completely or what?
(My plan is to use transactional funding for my proof of funds and do a double-close with my end buyer)
--From what I understand, there aren't really contingencies you can use with bank owned properties like you can with FSBOs. You are either purchasing the property or you aren't. Period. So is this true in this case? Am I leaping completely by offering? Are there any contingencies a bank will indeed consider?
--Anything else I'm missing about the wording of an REO contract or what to include or not include?
I am feeling like this "form" is really holding me up! I'm ready to take action, but just confused by these details!
Any standard terms out there for contracts with REOs that anyone has to simplify this process?
I LIKE the fact that an agent on either side doesn't have to be involved...I'm just trying to figure out the Do-It-Yourself version of contract-land with placing direct REO offers and drowning a bit!
Thanks for any help anyone can offer!