Questions--Placing Offer directly with bank on REOs

Questions--Placing Offer directly with bank on REOs

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!

My scenario:
--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!


Current Journal on Dean's site: The Second Chapter:

First Journal on Dean's Site: From the Beginning:

Talk to Joe

Joe has done this many times, did you get the empowering conversations? I think he just emails the offers to the asset manager he has contact with. Maybe you could call the manager and say " I am interested in offering on property A and B would you like me to email you my offer?|" They can say sure or no, maybe you could even get them to do the financing for you. Like offer lower offer with cash or an offer if they are willing to finance and get some money too! Just make the call, I think it's a little less formal when there are no agents involved.



Cathy B

Follow my progress at:

Thanks Cathy - yes, I need you Joe! :-)


Hmnnn...I have seen several posts from Joe of course on REOs and he inspired me to call these people. But I didn't....ohhhhhhhhh....I know what you mean...that conversations video that Dean offered. I didn't get it (wanted to, but limited budget and making payments to Academy, so I had to opt out, even at the great price, but it looked AMAZING as I am sure it is! I hate missing out on these things, but just had to say no to something at the moment)

Yes, I would love to ask for 100% financing on one of these, and saw those posts Joe made on that one.

So I had planned to also email Joe tonight with these questions too, but discovered he doesn't have PM. You can't PM Joe! (He probably made it that way...I can only imagine he is swamped or once was wih PM's)

I will reach out to him in his journal...I just was hoping not to hijack his journal with my issues...ha ha. Maybe I'll just put the link to this post there!

Thanks Cathy!!


Current Journal on Dean's site: The Second Chapter:

First Journal on Dean's Site: From the Beginning:


Thanks for the nice comments about Dean's Empowering Conversations video. I believe this is a tremendous series and I am signed up for the entire year. I always believe if I get one valuable item from each video I see or article I read it was well worth the time and money. Thanks for giving some great advice. Keep up the good work. Believe and Achieve! Smiling - Joe


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Joe Jurek CPA


I would be happy to answer your questions on the REOs. In the future, DG Members can feel free to post a question on my guest page or my journal. The best banks to deal with are the small local community banks and if the REOs are not listed with a realtor that is even better. The key here is to work on establishing a relationship with the bank. Once you work with them and try to structure win-win deals, you will probably have more REOs brought to you down the road. The key here is there is more value with building a solid relationship with the bank than trying for one great deal.

When making an offer the best advice is present it in an email. This gives the bank time to consider it without coming back with an initial "no". You can just list out the price and all the "other terms and conditions" you are looking for in a regular email. You can even include more terms/conditions than you want and use these are bargain chips if necessary. Once you reach an agreement you can draft up a contract. The contract is just a meeting of the minds of 2 parties and can be as long or short as you need. Just make sure all the appropriate information is covered to ensure a smooth closing. A real estate attorney could probably be of assistance here.

It may be a little difficult to assign an REO. Another approach could be to request 100% financing from the bank and rent and hold the property as long as it has positve cash flow each month. You could then sell the property down the road when the market improves. Try to find out if the bank is more flexible on their asking price or potential terms they could offer. If you work the numbers you could either offer a lower purchase price with a higher interest or a higher purchase price with a low interest. Either way the monthly payment may be the same, but the bank could have a preference depending how they have the property on their book. Most banks like a higher purchase price and woul offer low interest say at 4%. Good luck with these potential deal. Believe and Achieve! Smiling - Joe

P.S. Make sure the Empowering Converations series is on your list to Santa Claus. These are 24 discs that are packed with information.


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Hi neighbor Joe

Hi Joe,

I am in NW Indiana Michigan City,and just wanted to say hello.

I've read several of your posts and just wanted to
thank you for all your help to all of us here.
Thank you to everyones help here.

I am a newbie too and getting started. Yet to make a first deal.
Looking at all the information and gaining knowledge so I can
be successful. Reading Deans books too its all great ect, eveyone is great here.

Your post on REO is very helpful thank you.

Sincerely Kelly

Quick ???

I just met this guy who is a real estate agent who works for investor that buy directly from the banks or auction, or get assignment properties also, then sells to the cash buyer for not much profit because they buy and sells in a mass amount in a month and leaves the majority of the profit to the investor who buys them. A lot of the properties that was showed to me had a double closing involved. Me being a third party, is it even legal to close under these condition without anyone losing there license. Is there a way that I can sell a property or put it on contract from me to my cash buyer, with my mark up price, that is already in an existing assignment deal contract with the person I'm getting the property from? Is this even possible? Hope this make sense... Need some feed back, backed with knowledge! Thanks


Buy, Sell, Rehabilitate, and Manage Properties...

Thank you Joe!


I really appreciate your detailed response. This is so helpful to me! Sorry for my delay in getting back to you here. This is the first time in weeks I have been away from the site for a few days due to guests in town. Hope you had a great Thanksgiving!

I will be sending my email off today on two properties. Thank you for your advice! I will post my experience this week on what happens! This really puts me at ease Joe. I appreciate you taking the time to share.

And yes, definitely on the empowering conversations video...this looks like an amazing resource!!

BTW ---I commented on my journal about this a few days back too and just wanted you to know I LOVED you and Stacey in Dean's birthday video ---your banners and cake and decorations were SO in the spirit! Really made me smile. You are a gem to this site.

Thanks again!


Current Journal on Dean's site: The Second Chapter:

First Journal on Dean's Site: From the Beginning:

NJFJ ---this post may help

NJFJ ---to respond to your question...a double-closing may work for you.

Here is a post that may outline this option for you. Just note that it is critical to have a good buyers list in place prior to doing this:

And if you have questions on transactional funding, here is another post that reviews this as well (a particular company called Coastal Funding...I have not used this source, but from the thread, you will get the idea of what transactional funding is and there are other companies that provide it):

You may also do a search on Dean's site for: Proof of Funds (which will lead to better understanding of this technique as well)

Hope this helps!


Current Journal on Dean's site: The Second Chapter:

First Journal on Dean's Site: From the Beginning:

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