You’ve done your homework, you have viewed and assessed the property, you’ve crunched the numbers, and now you are ready to make put it in writing. What’s next?
If you have secured a real estate professional to assist you, the next steps he will help guide you through. With most banks, you will most likely make out a purchase agreement, sign some disclosures, agency, seller’s, Lead Based paint, etc., determine and earnest money deposit according to customary terms, and then your Real Estate Person will present this to the bank or REO. Then you wait! I have dealt with one bank who was very prompt and replied back in 24 hours, but usually its 3-5 business days before you get an answer back. Remember at the bank end this is someone who works at a desk, handles hundreds of these, may have to go to meetings on a certain day of the week to discuss offers, etc. They also usual work by the hour, so your Purchase agreement has no priority over anyone else’s that is on their desk. The only way it does make a difference is if there are multiple offers for the same property.
Then another form kicks in usually called a Multiple Offer Disclosure form, (that makes sense doesn’t it?). This forms purpose is to let you know that there is more than one bid on this property. This form usually indicates that you are on notice to submit your best and highest amount on the property in order for it to be considered by the institution.
What you don’t know at this point and cannot find out is the amount of the other bids. This is where you have already decided the highest and best bid you can make in order to ensure a profit when re-selling. Don’t get caught in the trap of going higher than you planned! Remember; walk away if it goes beyond your bottom line. When and if accepted they usually will provide their own addendum to your purchase agreement with the explicit detail of “their” terms. As with all documents, read over very carefully in order to understand it. Most usually apply a penalty if the property does not close due to delay by you as the buyer on their proscribed and agreed to closing date. You still should have opportunity to inspect the structure fully including termite, home, etc., to your satisfaction, before you proceed. You will probably be asked for proof of funds or financing from a recognized financial institution, and a certified check made out to either the listing or selling broker for the earnest money deposit.
With HUD properties they usually have the bids presented by a broker enrolled and registered with them, on line. They usually have an acceptance or rejection by midnight each business day. They do require Social Security numbers for these bids an identification as to whether you as the buyer are an owner occupant purchaser or investor. Their bids also may be limited for a set number of days to Owner occupant buyers, before they open it up to you as an investor.