FAQs

This pamphlet was prepared to be an informative guide in the REO purchasing process. It is not intended to be a binding agreement of any sort. The information contained herein is designed to create an informed consumer and to lessen the stress of the home buying process for the Purchaser, Selling Agent, and Listing Agent.

Submitting an Offer

REO (Real Estate Owned) Departments & Asset Managers require that any offer submitted be on their "Offer Worksheet" or the online equivalent. This is aimed at simplifying the process for the Asset Manager, who will more often than not, have a large number of assets under management and often in multiple States with vastly different forms. The worksheet will have the "basics" only. Price, Terms, Concessions, Closing dates. Upon acceptance of the offer all documents are sent to the Seller/Asset Manager for signature.

Earnest Money

1% or $1000, whichever is higher, on personal check or cashier check. NO promissory notes.

Offers CANNOT be contingent upon the sale of another property.

"Cash" offers MUST be accompanied by Proof of Funds (Cash means CASH).

"Financing" offers MUST be accompanied by Pre-approval Letter.

No early possession/occupancy. No exceptions!

Multiple Offers

In case of multiple offers, we will notify all the parties of such and request that the buyers submit their highest and best. The seller will review all offers and choose the best one to work with. Typically, the seller DO NOT accept back up offer.

Purchase Addendum

Each client has a purchase addendum that is required to be part of the purchase contract. Some addenda are available upfront for the buyer's signatures, others will be generated by the seller as a counter or once the offer has been accepted. The language of the purchase addendum CANNOT be altered/changed in anyway. If the buyers don't like the language then this is not the house for them.

How long before we (Agent & Client) hear back?

Timing varies depending on the Institution, the time of month (month's end taking longer), and the Asset managers file load. Often the Institutional Seller is in a different time zone which creates delays in response times. Additionally, the more complex the offer, conditions, etc. the more likely that approvals or responses have to come from "management", again delaying response times. As the Listing Agent, I am waiting too and I WILL FORWARD THE INFORMATION AS SOON AS IT BECOMES AVAILABLE TO ME - Asset Managers (as stated above) have a large number of assets under management and do not respond well to multiple and/or daily queries. Continued multiple and/or daily queries slow down the process for everyone involved (and for other agents and purchasers you have never met in other states). Please be considerate, we are all working towards the common goal of closing on the subject property. IF YOU HAVE NOT HEARD FROM ME IT IS BECAUSE I HAVE NO UPDATE TO GIVE YOU OR YOUR PURCHASER.

Counter Offers

since all offers are submitted on the worksheet or online, if your offer is countered it will be in the "worksheet" format or verbally from the listing agent. Once an offer is accepted the entire "package" (purchase contract, purchase addendum, copy of the check, pre-approval letter, etc) is sent to the asset manager for signatures. CAREFULLY READ THE NEXT TWO ITEMS.

I've received a Seller's Counter Offer with no signatures.

Yes you did. These forms are generated by the Lender's REO Manager or the Outsourced Asset management company (and often come to the Listing agent as an email attachment). Once an verbal agreement is in place, the buyers must sign all the forms first, the file is then given to corporate management for signatures.

**PLEASE FORWARD THESE DOCUMENTS TO YOUR LENDER (unless a Cash offer) SO THEY MAY BEGIN THE LOAN PROCESS.**

Verbal Agreements

Once you are informed that your offer is accepted, it is. (acceptance may be accompanied by the afore mentioned worksheet). REO departments and Asset managers give the "ok" and then go to their managers for signatures. (In 5 years, and literally hundreds of REO Transactions I have not had an Asset Manager "unaccept" an accepted offer. Yes, you could be the first, but it is highly unlikely.)

**PLEASE FORWARD THESE DOCUMENTS TO YOUR LENDER (unless a Cash offer) SO THEY MAY BEGIN THE LOAN PROCESS.**

Time Frames

Generally you will have 30 (to 45) days from mutual acceptance to close the transaction. Often the proposed closing date on the original offer is unrealistic due to the elongated negotiation and acceptance process with the REO departments. The Asset Manager knows that (unless your offer is cash) you can't close in a week and a half (for example). They are not here to work against you, asset managers know that appraisals, inspections and the loan process take time. They will assume that you have taken the time prior to making an offer to become pre-approved for the loan and that there will be no trivial delays beyond the 30 (to 45) day closing period. Read the Bank Addenda carefully - there is often a per diem late fee assessed for tardy closings. The Institutional Seller will not suffer delays due to the Purchaser's Lender not performing in a timely manner. Begin your inspections upon being alerted that your offer is accepted.

It is not uncommon to have closing delays due to title or deed issues. Buyers should be aware of this and be prepared to wait (sometimes it take weeks to resolve the issues). In case of a delay, an extension/amendment must be signed. The per diem late fee will not be assessed if the delay is caused by the seller's side.

Escrow

Like it or not, the REO Company chooses. Period. (the Listing Agent has no say in the matter either - I have my favorite Escrow companies and Escrow officers too, so were all in the same boat.) This is due to the fact that they have significant amounts of Title work done during the Foreclosure process. ESCROW COMPANY CONTACT INFORMATION COMES WITH THE SIGNED DOCUMENTS FROM THE SELLER. In all likelihood the Listing Agent WILL NOT HAVE this information prior to receiving this document package. While we all want to submit Earnest money on a time line in accordance with the Purchase Agreement, the Listing Agent WILL NOT HAVE this information prior to receiving this document package. I am waiting too and I will forward the information as soon as it becomes available to me. Continued multiple and/or daily queries slow down the process for everyone involved. Please be considerate, we are all working towards the common goal of closing on the subject property.

Inspections & Utilities

It is absolutely essential that you give 3 BUSINESS DAYS NOTICE PRIOR to scheduling your inspection. Some utilities (such as electricity) will likely be on prior to your making an offer, others will not (such as water if the property is winterized). If the property is winterized, it is at the buyer's expense to de-winterize by a reputable contractor/plumber AND re-winterize after the inspection. Some clients mandate that the process be done by their own contractor and the expenses would still be of the buyer's. The Listing Agent has NO control over the work schedules of CWLP, Ameren CILCO or water municipal employees. As such the Listing Agent will not be responsible for re-inspections &/or associated fees. It is not a bad idea to visit the property a day PRIOR to the inspection to check if systems are working.

Re-key

Some sellers mandate that the property is to be re-keyed prior to closing and the buyer is to pay for this expense. In case where is not mandatory, we still highly recommend that all buyers re-key their property immediately right after the closing.

Condition

Banks sell Property Assets in AS-IS, Where-IS condition. As a rule ONLY issues which are LENDER REQUIRED will be addressed. REO Asset Managers are VERY familiar with what constitutes a Lender Required repair and will not approve "cosmetic" "dated", or "wear and tear" related issues. Addressing non-Lender Required issues can be accomplished by raising the price and having the Seller "credit back" for the repair. Generally, these repairs will not be authorized to be completed prior to closing.

**If you have negotiated significant price, closing cost, or other concessions from the seller it is VERY UNLIKELY that they will grant repair concessions as well - if this is the case do not be surprised! Asset managers have "caps" on concessions they are allowed to give on each file**

Please feel free to call or email stephanie@dorealty.net with additional questions or concerns. I look forward to working with you toward the completion of this transaction