How to Buy Bank Owned Foreclosures

There are so many houses that are being taken back by banks, some have more houses than they know what to do with. Here are some tips on how you can buy one of those houses from a bank.

Difficulty: Moderately Easy

Instructions

1. 

   First find a REO broker. These are agents that specialize in the area of residential real estate (handling bank owned properties AKA REO homes. You can find them by asking your local Board of Realtor's for a list of brokers who specialize in the sale of REO properties.

2. Call several brokers until you find one that will like to work with you. Remember that REO brokers have many people that they are dealing with. Ask if he would be able to call you if any properties that come up. Some have so many clients that it may be several months before they get to you. If the bank agrees to your price the bank is locked into selling the property to you. If not try this:

3. 

   Decide on a price and have the broker send the proposal to the bank. If the bank accepts your price then they are obligated to sell it to you. If not the bank will make a counter-offer. Don't be put off by a significantly higher price as banks have to show to investors, shareholders and auditors that they tried to get the highest price possible. Go ahead and counter the counter-offer.
   
   Your offer or counter-offer will be reviewed by many people and even many companies. This process can take from one month to 6 months.

4. 

   Having a pre-approval letter and writing a buyer biography could speed up the process and is worth doing when making an offer.

5. You can also go directly to a bank and see if they are willing to deal directly with you without a broker. Start at your own local bank and see if an account representative can refer you to who you would talk to. Usually someone at the corporate office.

6. 

   If you are not successful that way, you can try contacting corporate headquarters and ask who you would talk to about their foreclosed properties in your area. Be extra polite and patient and know they probably have many calls on this very subject every day. If you are patient you should be able to forge a relationship with the bank.

[smilesatme1]

on 9/2/2008 Great tips! Thanks

[duncan411]

on 7/30/2008 Great Article!