This 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 all offers 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 State with vastly different forms. These worksheets will have the basics only-price, terms, concessions, closing dates. Upon acceptance of the offer, all documents are sent by email or mail to the seller/asset manager. All offers must be presented with earnest money & a mortgage pre qualification from a MAJOR lender.

**NO Promissory notes, or offers contingent upon the sale of another property. "Cash" offers MUST be accompanied by proof of funds.**

How long before we (Agent & Client) hear back? Timing varies depending on the institution, the tome of the month (month's end taking longer), and the Asset Manager file load. Often the institutional seller is in a different time zone that 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. Please be considerate, we are all working towards the common goal of closing on the subject property.  IF  YOU HAVE NOT HEARD ANY RESPONSE IT IS BECAUSE THERE IS 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. Once an offer is accepted the entire "package" ie, offer on the REO worksheet, counters addends, copy of the check, etc, is sent to the REO department 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 agreement is in place, the file is then given to corporate management for signatures (much like your files are given to the principal Broker).

**Please forward these documents to your lender (unless a cash offer) so they may  begin the loan process. Seller signatures can take time to receive. Start loan process as soon as possible. Asset managers will charge "per diems" if loan is not ready by agreed closing date.

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.

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 purchasers's lender not performing in a timely manner. Begin your inspections upon being alerted that your offer is accepted.

Escrow and Title Companies- Like it or not, the REO company usually chooses (the listing agent has no say in the matter either-I have my favorite title companies and offers too, so we're all in the same boat.) This is due to the fact that they have significant amounts of title work done during the foreclosure process. It may take a week to receive escrow instructions. Continue 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 making an offer, others will not (such as water if property is winterized). The listing agent has NO control over the work schedules of the utility companies-we will not be responsible for re-inspections and/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.

Condition- Banks sell property assets in AS-IS, Where-IS conditions. As a rule, only in certain instances will the bank consider repairs. **Asset managers have "caps" on concessions they are allowed to give on each file** Generally these repairs will not be authorized to be completed prior to closing.

Some asset managers require original signed documents. Be prepared to overnight all original documents and addenda with accepted offer.

Some earnest money deposits are submitted with offer to the seller's closers-in such a case you will be notified.