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Frequently Asked Questions
Regarding REO Properties

Read the following, and if applied, it is a sure fire way to put in a winning offer on these homes

What is an REO property?

It stands for “Real Estate Owned”. It refers to an accounting line item on a companies asset information. It is property that the company owns, or is holding as an asset. In this case the bank owns the property. You can easily determine what the bank paid for the property by looking up the tax record and looking at the last sale amount. Top

How low is the bank willing to go?

Not as low as most people think. The bank knows from experience that if they offer the property at a reasonable price or just slightly below market value (depending on the condition of the home) they will invariably get an offer at or close to what they are asking in a reasonable amount of time. Your buyer can offer as low as they wish, but the bank will often ignore “low ball” offers and in fact are not required to even give a response back to the buyer at all. Our suggestion is to make your best offer if you want the bank to accept your offer or at least counter it. Just a statistical fact to give some food for thought, New York homes typically sell for around 95-97% of the asking price. Top

What is the Wells Fargo addendum?

The addendum takes the place of the initial purchase agreement. Basically Wells Fargo will re-write the entire contract in terms that they are willing to accept. There is no exception to this rule. They pretty much take a “tough tooshies” approach. If you don’t like the addendum, you can always withdraw your offer once you review it. Top

How long does it take to get a response after I put in an offer?

No offers will be considered for the first 7 calendar days a home is listed. The date the property is listed is counted as day 1. **Seller will not entertain any offers until the 8th listing day at which time ONLY offers from NSP Buyers, Municipalities, Non-Profit Organization & Owner-Occupant will be reviewed.

Calendar Days 8-12: We will consider offers on the property ONLY from NSP buyers, Municipalities, Non-profit organizations and Owner-occupants.

Calendar Days 13+: We will consider offers from all buyers. On the 13th listing day Offers from all Buyers will be reviewed.

Typically it takes 1 to 2 days but it varies depending on the workload of the asset manager. The offer goes to the asset manager who generally has a couple of hundred files that he or she is managing, so it takes a little time. If the offer is in an acceptable range, he will in turn take it to his supervisor for approval or to issue a counter offer. Top

Can my buyer ask for closing costs?

Yes, you can ask for closing costs. You can ask for anything like you would when making an offer on any other property. The best strategy to get an approval though, is to make the offer as “clean” as possible. Top

Can we do an inspection?

Yes you can have a home inspection. It is best to accomplish this within 10 days of acceptance, as this is what Wells Fargo allows. Top

Do we have to get Wells Fargo pre-approval?

In short, YES! If you want your offer to be contingent upon financing, then Wells Fargo requires that you get pre-approved with a Wells Fargo Home Mortgage Branch or the Neighborhood Assistance Corporation of America (NACA). However, you are not required to use them for financing, but at the very least you have to get a pre-approval from them. Even if you have a pre-approval from another lender, this is still required. Basically this can be done with a 15-minute phone call and authorization to pull credit. Pretty painless. When you provide a Wells Fargo Pre-Qual Letter ahead of time, it also makes the negotiation process go much faster and smoother with the bank. You can locate a local branch here or visit www.wfhm.com. The best bet is to just call a local branch from the Wells Fargo website and get the letter from them. Top

Why does Wells Fargo require a Wells Fargo pre-approval?

They want to make sure it is a qualified buyer. They do not know every mom and pop mortgage broker out there, and how experienced they are in lending. You could provide us a pre-approval letter from XYZ mortgage, but for all Wells Fargo knows it could be a brand new brokerage working their first deal, and would completely botch the file. Again, we are only talking about a 15-minute phone call. Just get your buyer to call Matthew Bannan from Wells Fargo Home Mortgage at 914-589-9907 about getting pre-approved. Top

What does as-is mean?

The properties were obtained through process of foreclosure and being sold as-is, “what you see is what you get”. There is no guarantee of condition of property as the seller has little or no direct knowledge about the property. Top

Rising Star Realty & Property Management, Inc 1750 East Main Street Mohegan Lake, NY 10547
Office: 914-243-4885 Fax: 914-401-4280
igor@mysellingsystem.com
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