Any house can be a foreclosed house
Homes that have been taken back by lenders through foreclosure are known as "REOs," an abbreviation for "real estate owned." Citibank has many REOs it is trying to sell.
Instructions
1. Obtain a pre-approval letter. Asset managers, who handle bank-owned property, are flooded with offers on desirable REOs. Some are taken seriously, while others remain at the bottom of the pile. A buyer will want to demonstrate her seriousness by having gone to the trouble of verifying the information on the lender's application by providing pay stubs, tax returns and other qualifying paperwork.
2. Begin devising your offering price.
The Citibank REO listing agent will have priced the home pretty much in accordance with the area market, but somewhere near the low end of the pricing range. Have your buyer's agent prepare a Comparative Market Analysis (CMA) which will show what area homes are selling for.
The CMA should include some lender-owned homes that have been both listed and sold. Having this information will help you offer a price that's both low enough for you to get a good deal but high enough for the lender to accept.
3. Have a professional home inspection contractor inspect the home. REO homes are notorious for damage left by the previous occupants. Many have been abandoned for months or more. The inspection will determine how much you'll need for repair costs--or if you even want the home.
4. Write your offer. You want to make it as low as you can but not so low that Citibank rejects it.
If you want Citibank to make repairs, specify them in the offer. Generally, lenders won't make repairs on REO properties, but there are exceptions. FHA-required repairs may be made, for example.
If you want Citibank to pay for all or part of your closing costs, state your request in the offer. But don't get your hopes up. While there are exceptions, lenders won't pay closing costs on short sales or foreclosed properties.
5. Wait as the asset manager evaluates your offer.
Some asset managers take a long time to respond. Citibank is better, and you may hear back within a couple of days. Most likely, you'll probably wait a week or so.
At that time, your offer will be rejected, accepted or countered. If it's rejected, you're free to write another. If it's countered, you and your Realtor can negotiate the differences.
Tags: have been, your offer, closing costs, make repairs, that have
