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In today's real estate market, most banks have more houses in their inventory than they can handle.   The are the leading home seller in a market that has very few buyers.

 When buying these properties as a real estate investor or home owner, it is important to make sure your offer will be accepted.

 Follow these tips to successfully buy REO properties cheap.

1)    Get pre-qualified
 Any time you are buying properties from a bank, you must show proof of funds, either in cash or load pre-qualification.

 No bank will open negotiation until they get this, so it must be your first step.

2)     Get a good real estate agent
 Most bank owned properties are listed in the MLS by a real estate agent.   You must therefore make any offer through the Realtor.

 You therefore need to get a Real estate agent working for you to make an offer.

3)    Do your due diligence
 Most bank owned properties need little to no repair.   A good repair estimate is a must when buying these properties.  This will be helpful to negotiate a better price.

 Some conservative comps will be necessary to negotiate a lower price.

4)     Get it inspected
 You must get this when buying bank owned property.  Banks don't like to fix houses, but will give you a discount for repairs.

 Put an inspection clause in your contract to get you covered.

An inspection will bring out issues you were probably not aware of.   You will need these to get your offer price lower.

 Banks will reject your offer if you require them to fix the property.  Your buying terms should be as is where is.  Ensure your contract shows this.  They will give you a discount based on needed repairs.

5)    Other costs
If the home is in a community where there is a home owners association, make sure that all dues are paid up, and your fees will be prorated from the day you own the property.  In foreclosed properties, it is common for fees and fines to accumulate.

 Ensure you get these fees credited at closing.

 Make sure there are no back taxes owed.   Make sure you receive a prorated credit at closing.

Lastly, make sure the utilities are paid up; you could be stuck with huge bills that were not cleared by previous owner.   Be sure to clear these.

6)     You offer should be lower than asking price
Banks are willing to negotiate.  Always make an offer lower than the asking price.   Properties that have been sitting in the market for a while will be more discounted.

 Do not offer more than 10% lower than the asking price.   And if your offer is not accepted, you can make a higher offer depending on the bank's counter offer.

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