I just made an offer for a buyer on a foreclosure. We went full price w/20% down but asking for 2% closing costs because she has to close thru their company & her bank was going to cover all costs. The house is amazing & we are both really excited. Of course, it's "as is" w/right to inspect. My question is, in most deals you have the right to cancel if the inspection turns out w/extensive issues. Is a foreclosure the same? In the addendum it states the amount of days you have to turn in the inspections to them but I just read the buyer agrees in accepting the property in as is condition. Also, what is the amount you usually write in your contracts under if repairs exceeds? Is $5000, too high? In my office they usually do $1000. Thanks for your help. The other foreclosure they did not accept the offer & I have noticed in the area they are taking close to asking price & even asking price.

You have the right to cancel the deal within a prescribed period for the home inspection. The amount for repairs is usually Zero, the bank will not do any repairs. Thats not to say they will not re-negotiate that amount if Buyer decides to cancel the contract.

I have seen the banks pay for repairs and 3% closing costs. It all comes down to their net. You should have your 10 or 17 day contingency period to get your inspections done.

Thanks, I guess I just want to make sure all is correct & that my buyer is protected. I am looking forward to get this deal. It's a Countrywide foreclosure. There are so many in my area but this one is a really a great deal!

Why I don't understand is that buyers must preview, view, inspect the property before submitting an offer. I guess we all get excited with submitting an offer for a buyer, but counseling takes place before making the decision to withdraw your purchase proposal.

You may find bank, servicer companies, and other investors who really stress if you back out the deal, they may keep your ED. That's the reason the market is getting inflated again with multiple offers with people bidding on a house they don't even know if that's what they want.

Here's a few tips to get your foreclosure offer accepted by the bank:

1) Buyers should present their highest and best offer. In many cases where there are multiple offers, "it’s be good or be gone." The bank will take the best offer and probably not counter any of the others. In my market, homes are selling above list because banks alreay price it way below market value. Buyers making low-ball offers 20% or more below list price are wasting their time.
The bank and listing agent have done a lot of research before listing the property for sale. And contrary to popular belief banks are not desperate like so many want to believe.

2) While you are making your offer or waiting for it to be accepted, email is the preferred method of communication with REO agent. Most big time agents have developed automated systems to deal with the volume, so good luck ever speaking with them directly. Everything is online. Email is the best means of communication in the REO world today.

3)Know the offer rules of the property you are trying to buy.
If you want your offer to be taken seriously, READ THE LISTING CAREFULLY, and follow the directions! If the listing says you need an "approval letter from ABC Bank," and you send one in from XYZ Bank, plan on rejection.

4) Know your property as well. If you are doing FHA and find a broken window or missing flooring for example, address it in the offer. The REO listing agent is usually a very experienced agent who works with banks. They know their lending guidelines and FHA. They know you can't close your FHA loan without fixing these items. You stand a better chance of getting your offer accepted when you address the problem, call for them to be repaired prior to coe, and even have the lender write them into the pre-approval letter. The bank knows you have done your research. More importantly, the bank also knows your lender understands what he is getting into and has the confidence in the buyer and has his lender on-board. Confidence means contract.

5) Be patient. Banks may accumulate multiple offers before responding and will never answer an offer over the weekend. Plan on five business days from the day you make your offer. If you don’t hear anything by then, it’s probably been rejected. Email the listing agent to confirm this.

6) Be careful with closing dates. Many people today write an offer with a 30-day close. A week or so later, they get the offer accepted with a $100 per day late fee, yet they are too afraid to counter the close date! Dont be afraid! The bank knows you have very little chance of pulling that off today and are now going to get a little extra money out of you. Its important to get the 30 days from the full execution of the sale contract, not the original date of the offer. I recommend writing into the contract: “close of escrow to occur 30 days from the date of seller's acceptance of offer.” The banks understand and will very likely grant this to you. If you don’t negotiate it upfront, plan on paying for it in the end!!

With these tips in hand, you should be able to get your offer(s) accepted. Of course, the most important advice anyone can give you is know your market and how things are done at your local level!!

Good Luck!
-Renee

Renee - Very well written guidelines above. Thanks for taking the time to write such a lengthy reply. You may want to also post it under REO/BPO tips and tricks topic and I feel it could be very helpful to many agents.

You however should be careful telling agents how to write offers & special clauses as that could be construed as practicing law, of course if you are an attorney then that is ok. However here in Florida you MUST have a definate closing date, cannot be an or about or 30 days from acceptance. Must be a definate date.