Dealing with a Bank as an Owner

REO property is a bit of a buzzword on the market these days, as inexperienced buyers see yet another way to purchase a home at a great deal and gain great returns. However, buying REO can be a lot harder than buying from a human owner. If you've ever had any dealings at all with banks, you know the truth of this statement even before we present you with some evidence. Despite the provision of public funds to bail them out, banks aren't changing their approach to the public anytime soon.

That said, there is a possibility of getting a good deal on REO property as a home buyer if you are prepared to go through a bit of a process. Banks are more prone to sell these properties today than ever before, largely because they have more of them than ever before. If you have found a house you love but it's owned by the bank, here are a few things to keep in mind.

You're dealing with an entity, not an individual!

That means a good sales pitch won't really get you anywhere. The listing agent will be human and will talk to humans, but any offers need to be taken to a group of humans, who eventually become a corporate collective. In fact, odds are that the REO division of the bank you are dealing with is not even located in your home town, but in the next largest city to you.

That means two things. First of all, any communications are going to take a long time to get back and forth. If you were dealing with an individual seller, you'd hear back within a day. With a bank, expect three to five days in between calls, more if it's over the weekend. It also means even reasonable arguments may not get you far in the negotiations, because the corporation is looking to protect its bottom line.

Stay the Course

However, if you are persistent and use the right methods of approach, you do stand a chance of buying that REO property at a good price.

Remember, banks love paperwork, especially from experts. Invest some time and money into having

A CMA drawn up. This will demonstrate to the division the real value of the property they currently hold.

A home inspection completed. Lots of REO properties need some work, but the corporate heads in New York don't know that. Having some documentation will help convince them of the fairness of your offer.

Having patients and expertise on your side are your biggest assets when buying REO property. Don't expect a killer deal, but you should expect a fair one.