#1 Mike - 06 November, 1:34 PM

Do not use the same agent as the lender. Even if the agent agrees to represent both you and the lender as a dual agent, for all practical purposes the agent will represent the lender’s interest over your interest.
Remember this agent wants more business from the lender. The agent knows that he will probably not be getting any more business from you.
The agent will be biased toward the lender.
I recommend that instead of a real estate agent or REALTOR, you hire an attorney who specializes in real estate law to write your offer and hire a real estate appraiser who is a Member of The Appraisal Institute to protect your interests.
Ask your attorney to include language in your offer that makes your offer contingent upon the fair market value as determined by your appraiser, not the lender’s appraiser.
Also include language that makes your offer contingent upon inspections of the roof, the structure, the heating, plumbing and electrical systems and the foundation. Also a termite inspection and an inspection for water damage and dry rotat the minimum. Your inspectors may recommend further inspections. I recommend that you do those as well.
The inspection period should be at least 21 days to give your appraiser and your inspectors sufficient time to make their inspections, write their reports and get their reports back to you and give you enough time to review the reports.
Do not let the agent for the bank try to reduce the time for the inspections.
Also do not let the agent for the bank take your deposit. Only put your deposit in a trust account with the escrow company. Take your check for the deposit to the escrow company yourself. You can get a receipt for the deposit from the escrow company to give to the agent for the seller as proof of your deposit.
This is very important in case you have a dispute over the deposit later if you have to cancel the transaction.
Also make the contingencies only removable by you in writing, not by the passage of time.
When your appraiser determines that the fair market value is less than the amount that you offered, then give the seller (the bank) two choices:: Either:
1. Agree to reduce the contract price to the fair market value as determined by the appraiser,
(further reduced by the 3% of the purchase price that the lender would have paid your real estate agent, because you are not using one,)
(you are using an attorney instead and should be compensated by the amount of money that the seller is saving by not having to pay your agent), or…
2. Agree to cancel the contract and direct the escrow company to return your deposit.
Also when the inspection reports come back showing the need for repairs, again give the seller two choices: Either:
1. Agree to make the repairs using a licensed contractor or further reduce the contract price by an amount of money that is equal to the cost of repairs performed by a licensed contractor. or…
2. Agree to cancel the contract and direct the escrow company to return your deposit to you.
If you will follow the steps that I have outlined for you, then you will get the property at true fair market value and you will also save the 3% ($13,500) that the bank would have paid to your real estate agent if you had used one.
Also your attorney and your appraiser will do a much better job for you than any real estae agent or REALTOR and they will cost you much less.
Do not be surprised if you have to cancel a few transactions before you find a seller that is willing to close escrow with you.
Remember, this is a seller’s market. There is a huge glut of property on the market. The seller needs your money far more than you need the seller’s property.
The instructions that I have given to you apply to any seller, not just the bank.
Also, it is better to cancel a transaction than to pay too much for a property.
Congratulations on your new house!!!!
.

#2 Stevie B - 06 November, 2:00 PM

Please remember that real estate is a game – since it is an REO, he is only a conduit…unless he agrees to take a smaller percentage, I would probably get a buyer’s agent. Depending on who owns it (bank/mortgage company/or corporation) – the timetables for these types of properties can vary greatly. I would low ball the offer hard-core, but since you appear to already be a bit personally invested in the property, I may consider a slightly more negotiable offer. There are a lot of questions to ask such as: how is the market in that particular neighborhood, how many others are for sale in the same area, how much rehab will it take, how long has it been on the market, and the most important – how much are you willing to spend on it….Keep in mind it is a buyers market – but also bear that there may be other investors interested in it as well…Good luck – hope it helped. Thanks

#3 Tony M - 06 November, 2:59 PM

Remember that seller’s agents are legally obligated to represent the best interests of the seller. In a dual-agency situation, they can represent you ethically, but the best you can hope for is ~50% loyalty.
If an agent knows s/he will be getting both ‘sides’ of the commission, they will often be open to negotiating a lower commission rate with the buyer. Since this is an REO property however, I suspect it’s a lower commission rate to begin with so I wouldn’t expect alot of enthusiasm there…
An outstanding Buyer’s agent/broker will provide you with data on the home’s present situation that will help you make an INFORMED decision on what YOU think is a reasonable offer on the condo.
Don’t forget that while the old saying goes “The Seller Pays the Broker Commissions”, the truth is that it is you – the Buyer – who funds the transaction, which is what pays the commissions – you might as well enjoy 100% loyalty & representation for your money by hiring an experienced Buyer’s Agent.

#4 Stacy - 06 November, 3:35 PM

No I wouldn’t because any agent with half a brain writes into the contract that if there’s no buyer’s agent, the seller’s agent gets the full commission. It’s very unlikely you’d save a dime, buy you’d be handing the money meant for your representation to a person who cannot and will not serve your interests.