There are so many homes on the market today, how do you find a good deal? REO's, most deals are found in REO’s(Real Estate Owned. Properties owned by banks). You need to learn how to shop for REO’s to get the best deals. Here are some tips

1. Set Go: Be prepared, BANKS ARE ONLY INTERESTED IN SUCCESSFULLY SELLING THE HOME! I can’t stress this enough. Be prepared, and do your home work. Have your Pre-Approval letter ready, have your loan agent verify your full qualification for the loan, have all your paperwork in order (your loan agent will ask for bank statement (usually 3-6 months), rent receipts (12 months), landlord information, 2 years of tax returns, copy of social security card, copy of driver’s license, and employment and housing information for the last 5 years to name a few), have your deposit in the bank (banks will require 3-10% minimum deposit for offers), and designate your goal. Banks will lower the price depending on how strong a buyer you are on paper. Your agent should properly prepare you for all of this.

2. Treasure Hunt: When you start looking, make sure you look for REO’s, Bank owned, Lender Owned, or Relocation Owned properties. Do not confuse REO’s with short sales. Short Sales are not owned by banks, they are still in the possession of the home owner in distress. Unless it specifically says “short sale has bank approval”, stay away from them.

Know the neighborhood. The best way to spot a good deal is by the comps in the area. A home on sale for $300,000 in a neighborhood that averages $500,000 can be a great deal. However, a home for $300,000 in a neighborhood averaging $350,000 for a similar home may not be a good deal.

Once you find a home, your agent should provide you a price analysis of the home complete with comps, pending sales, and closed sales in the neighborhood. Things like demographics, location, crime, city issues, and rental market should be part of the data you receive. The information should be current, precise, and applicable to help you render a decision to make an offer or move on.

3. Red Flags: When buying REO’s set guidelines for your self. Really be attentive to what you need, how many bedrooms, how many bathrooms, how much square footage, and most of all fixer or move-in conditions. Once you set the goal for the home weather it be a home for you or a rental, make your budget according. You should be honest and share your goals with your agent so they can help you stay on track.

Believe it or not, some banks own properties that have little or no damage and some are major fixers. Do not down play a repair as minor issue. Remember minor remodeling or renovations can and almost always do mushroom into larger projects because of unforeseeable damage. Stick to your budget or goal and don’t fall into that trap!

4. Detours: Now that you found the home you want, your agent will work with you to fill out the contract. Things that make your offer better than others; lessen the number of days for contingencies, have your agent or yourself pay for the home warranty, if possible pay your own closing costs, have a solid FICO score, have a substantial deposit, and keep other contingencies off the contract. Your agent will guide you through the mind field to get the right offer. Once the offer is submitted, banks have multi-layer authorizations so expect to wait, could be as little as 3 days or as long as a week and a half for an answer. Sometimes they are just waiting for more offers to come in. Keep in mind banks offer some of the lower prices around, it may create a multiple offer scenario for those awesome deals. You and your agent need to be prepared for multiple offers and request that put you ahead of the competition.

5. Tidbits:  If you buy a fixer have a good physical inspector. Be sure you pick an inspector with experience in every part of the home.

Sleep on your decision. I always recommend my clients prepare themselves mentally before we submit an offer.

Get a loan agent you can trust. It doesn’t matter if it is a broker or a bank, when things goes wrong you need to make sure you can make one phone call and feel confident about the information given.

You need to communicate with your Realtor. We cannot read your mind so share with us all there is to know about your situation. This way we can avoid snafus before they become disastrous.

Hopefully these tips can help you understand the process and your agent or I can fill in any blanks