Unique Features of the REO Market

"AS IS"

Many REO properties listed by One West are sold "as is with the seller to make no repairs." Usually the seller has a corporate addendum with "as  is" clauses that the buyer must sign as part of the sales contract. Most of the REO properties listed by One West have been acquired by the selling corporation (seller) through foreclosure. These properties may have been neglected during the foreclosure process.

The seller does not provide a sellers disclosure statement.  Information regarding how the former owner maintained the property other than as evident by the current condition of the property is not available.

The seller has considered the "AS IS" condition when establishing the asking price.  Each corporation has a number of days they allow for inspections.  The cost of all inspections is the responsibility of the buyer. If as a result of the inspection the buyer feels the property needs more repair than expected and notifies the seller's agent within the number of days allowed for inspections, the buyer may withdraw the offer to purchase. The sellers seldom renegotiate the sale price after the inspections.

Financing

It is very important to be properly pre-qualified for financing prior to making offers on One West Listings (see Presenting the Offer below). Prior to acceptance of a contract, the sellers always require verification of the buyer's ability to finance the purchase.

Several financing programs are available for the purchase of "as is" REO properties.  We can provide you information on how to become pre-qualified for one of these programs.

FHA, VA, and many of the special financing programs available to homeowners require building inspections to evaluate the condition of the property.  Seldom do the properties listed by One West meet the requirements of these programs

None of the sellers that list with One West are willing to hold a second or do seller take backs.

All pre-qualifying financing letters for "as is" purchases must state that the lender is prepared to make the loan based on an "as is" appraisal.

Here are a few companies which provide financing programs for "as is" properties:

Cash Offers

Buyers who make cash offers should be prepared to present to the seller verification of funds available to close.

Also, sellers often require cash buyers to close within in 10 days of the acceptance of the offer.

The Offer Process

Presenting The Offer

When presenting an offer to purchase an REO property listed by One West, it is important the buyer recognizes that the seller is a corporation, not an individual. Most often the corporation is out of the Saint Louis area, and may even be in another time zone.

Your offer is presented the same business day received. Offers received after 5:00pm, weekends and holidays or when the One West office is closed are presented the next business day.

Usually we receive a speedy reply; however, sometimes the corporate asset manager responsible for making the response for one reason or another may not be able to respond within the time line required by the contract.

As with any real-estate transaction, when responses are not received within the time line required the deal is dead. However, if either party is still interested in continuing the negotiating we will make every effort to set the process back on track.

Multiple offers

 Often One West will receive several offers on the same property.  When this happens the seller will instruct us to notify all buyers that there is a multiple offer situation and to deliver to One West by close of business the next day each buyer's best and final offers.

We then present all of the "best and final" offers to the seller. The seller reviews all the offers. The seller is not obliged to accept any of the offers. If none of the offers reaches the sellers requirements for the sale, they may counter the buyer who has presented the best "best and final" offer.

If the first buyer that the seller counters and the seller do not reach agreement, the seller may counter one of the other buyers. Sometimes before the seller has reached agreement with any of the buyers who were in the multiple offer group, One West receives an offer from another buyer. We then inform the seller that another offer has been received.

When evaluating offers in a multiple offer situation, the seller is looking at many aspects of the offers.  Sale price is not always the ruling factor in the seller's decision.

Closing

Closing Date

Sellers expect to close on the date agreed upon in the contract. Seldom are the sellers willing to extend the closing date. Usually they instruct One West to reactivate the listing immediately if the buyer does not close on the date specified by contract.

Sometimes corporate sellers will sign contract addendums extending the closing date; however, they almost always require a per diem as a condition for extending the closing date.

The per diem is an amount per day multiplied by the number of days past the contract closing date. The per diem amount is then added to the sale price. Example: If the per diem is $100.00 a day and the close is ten days late the sale price is increased by $1,000.00.

Surveys

One West recommends that all buyers request a survey prior to close. Some lenders insist on a survey. If a survey is to be ordered, the buyer must notify the title company to order the survey. Surveys are not ordered without the buyer’s request.

Agency

All One West Agents are either Limited Sellers Agents or Sub Agents representing the seller. Our agents are prepared and most willing to provide buyers with assistance in the process of purchasing the property; however, it is important that you realize that we have a duty to exercise reasonable skill and care for the seller and to promote the interests of the seller with the utmost good faith, loyalty and fidelity in sale of the property.

One of the first questions we always ask when someone calls One West for information about one of our listings is "are you working with an agent." We ask this because if you are working with an agent it is your agent's responsibility to call us for any information you require. Your agent should be your go between yourself and One West.

Other Sources of Information

Please also visit our REO FAQ's page.  If you have additional questions, email Barry@onewest.com.