When it comes to buying real estate today, REO is practically the only game in town. However, if you want to win at the Real Estate Owned game, you have to know how to play.
Mario Zazueta, a Realtor at our Livingston office, knows how to play the game and knows how to sell and buy REO properties for his clients. That’s especially important when an REO listing can receive 20 or more offers.
REO is property owned by the bank. The bank, which doesn’t want to be in the real estate business, obtained the property through the foreclosure process after the homeowner stopped making mortgage payments. If a foreclosed property fails to get bids at an auction, it becomes an REO property.
Zazueta, 41, said about 95 percent of sales he’s closed this year have been REO. An impressive number, considering through September he’s sold 180 homes and is on pace to top 215 transactions this year. He says there is a secret to his success.
“I think it’s the relationship I have with other agents and bank asset managers,” said Zazueta. “And writing a clean offer.”
A clean offer is one that is the easiest for the bank. Such as offering to purchase the property “as is” and without contingencies. “Don’t write you want a pest inspection,” he said. “If you ask for too much, they’ll go with the cleaner, easier offer.”
A cleaner offer can feature an all-cash deal, a large down payment, a short escrow, and even a larger than required deposit. Zazueta said a bank recently selected his client’s all-cash offer of $205,000 for an REO home, over a rival $255,000 bid. The bank went with the strongest offer.
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