How is the best way to go about leveraging the use of cash offers? Do you go to the banks directly and ask them for their REOs or homes they are about to auction? Or can I just look in the MLS and shoot sellers emails? I wouldn't think agents would want to work with you on cash offers because they don't make as much comision.

Thanks in advance.

Large banks like Wells Fargo,etc. have REO departments and use agents so unless you are buying in bulk (like 50 properties,etc.) they won't usually talk to you but refer you to the agent they have assigned that listing to.

You can go to local and regional small to mid size banks where they might have one collection manager handling their REO. Sometimes you can be put on a mailing list for those properties.
Usually the local and regional banks also use a broker like myself to market the properties.

I typically do not like auctions as the goal is to drive up the price with multiple bidders. Some allow online bidding which I like because I don't have to go somewhere and take a whole day to bid on something that might not work out.

Buying a foreclosure at the courthouse steps will depend if you are in a redemption state or not.Usually most properties at the steps are over leveraged so it's better to wait for the bank to foreclose and get it ready for REO sale.

When looking at REO "cash is king". A big point though is condition of the property. The most money to be made is in repairs needed.

Example 1 : REO 2 year sold that just needs carpet priced at 100k.You offer 70k cash but regular homebuyers like the property as well and offer 95k to which you lose out. The asset managers love cash but will take a finance offer if it nets them more money.

Example 2 : Property needs extensive repairs.Most homebuyers like the low price of 60k but cannot get financed because they want to buy with FHA loan.You come in and offer 45k cash with a short inspection period. You purchase and sink 20k into it and now the property ARV value is 120k and you have great cashflow.


Sometimes you can buy a move in property for cheap but most of the time will lose out to home buyers offering closer to asking.

As always thanks for the advice. I will do as suggested for REOs

Get an agent. Commission has already been negotiated when a house goes into the MLS. If you are unrepresented, you will not save anything - the listing agent will simply keep ALL of it. Why not get representation if it's already paid for? That's just how it works. The consumer thinks that they can save that 3% if they represent themselves but that is a complete fallacy.

And an agent makes the same on a cash purchase as they would if you were getting a mortgage. You should be able to find countless agents willing to help you.

Never said I didn't want an agent or that I would save a buck.

But you said agents wouldn't want to work with cash because they make less commission, and there is absolutely no basis for that.

I would not think they would want to work with cash buyers is different then saying I want to save a buck and buy FSBO or something like that.

But anyways I asked my agent and shes cool with it and does earn a commision.

Pro, the commission is paid by the seller and is negotiated before the property is listed. The commission paid will be based on the final sales price. Whether you are getting s mortgage from a bank, getting owner financing or paying cash makes absolutely no difference to how much commission an agent will earn.