Frequently Asked Questions | Bank Bulk REO Property Deals

Frequently Asked Questions

Q. What does REO mean?
A: Real Estate Owned, it is the term that banks use to identify their foreclosure properties. These properties are now called non – performing assets (bank is not making money on them).

Q.What is a BPO?

A.BPO is short for (Broker Price Opinion). Some REO packages from banks will have BPO’s or assessed retail values. These values come from Comps and are used to justify the LTV.

Q: How do I know if it is a good price for the homes?
Do you own homework, the bank might give you their (BPO) broker price opinion, but you must understand that is just an opinion of an agent trying to get a listing, you must do your own valuations. Since the market is changing fast today, a valuation review by the buyer is recommended.

Q: Can I Carve Out (cherry pick)  from the portfolio?
A: Possibly. Any listed tape note if its a Carve Out tape.  When the offer is submitted to you from the bank, you have a 5 to 17 day due diligence period to make your decision. Unless the property fails to meet your buying criteria, you can not selectively veto properties.

Q: Can you show me the list of properties so I can decide?
A: Yes. We can provide you with a general summary of the portfolio.

Q: Can I choose which city/county/region the properties come from?
A: In the past, this was possible, but due to the overwhelming demand in the market, some banks no longer allow geographic filtering. Typically, portfolios are given “as is”; however there are some banks and Hedge Funds who will do regional filtering if they have the inventory available.

Q: You said the minimum portfolio is $1 million. Will the bank consider less?
A: Banks are giving preferences to customers with larger purchasing powers. We will strive to meet as much of our investors’ needs as possible but, in order for the bank to take your offer seriously, you should be prepared to make at least a $1 million commitment. The $1 million minimum is on the purchase not the quoted portfolio size.

Q: What type of payment will the bank take? Can I finance these deals?
A: The only viable financing scenario for this type of a transaction is via a line of credit. You are expected to have either cash or line of credit to make these offers. Commercial loans or hard money loans require assessment of collateral. Given the nature of these transactions, and the proof of fund requirement, Escrow deposit requirements, it makes assessment escrow difficult. There are a few hard money lenders who have actually done bulk deals before. These will be the only ones allowed to be used. Cash buyers are given priority from the banks

Q: Do you have commercial or multi-unit properties?
A: Try us. We do come across commercial and multi-unit properties from time to time. The bulk of our business is in single family residential.

Q: Do these properties have clear title?
A: Bank properties have clear and sellable title from the banks. Title insurance is still recommended. Some tapes from Hedge Funds only come with Quit Claim deeds.

Q: Are these properties listed with a real estate agent?
A:  Maybe.

Q: Are these properties occupied?
A: These properties are generally vacant.

Q: How many broker chains are involved in these transactions?
We work mostly with banks directly to make these deals available to you. However, if others are involved a full disclosure to all parties involved is made..

Q: How can I be assured of my banking confidentiality? Who gets to see my proof of fund?
A: The proof of fund is done exclusively at a bank to bank level. No one in the brokering chain is privileged to this information.

Q: What Prices or LTV’S are available?
A: Prices and LTV’s are based on the bank/sellers motivation as well as buyer demand. For example you will pay higher prices for Az and Ca because they are the most requested states, so the inventory is low and priced high

Q: Why can’t I go directly to the bank?
A: Getting the time and attention from an Asset Manager would be difficult, if not impossible, for a single individual or buying entity. Like most businesses, Asset Managers sell their inventory through mass distribution channels including Hedge Funds and large wall street buyers. They are instructed to deal with large outlets of distribution, such as And even if you were able to be direct, your end cost would be the same. Lenders know exactly what is going on and what they can sell portfolios for and they won’t leave any money on the table.

Q: What slows down order processing?

A: Incomplete information, old dates on forms, unreasonable LTV requests, unsigned documents or inability to verify funds in a timely manner and busy and slow compilers. Please ensure all forms are complete and current.

Q: What escrow company will handle the closings?

A: The Escrow Company will be chosen by the bank. Buyer may have the option to choose the title company, depending on the lender.

Q: How do you pre-qualify buyers?

A: Our goal is to conduct business in the most ethical and efficient manner and we expect the same from our clients. More than 70% of our order applications are rejected because the “Buyers” have no real money for purchase or the orders have unrealistic expectations, most commonly the buyer’s required LTV’s. All orders must follow a lender approved process and must be reviewed several times to ensure all your documents are complete. It makes no difference how well known you are, there are no exceptions to the process. We won’t jeopardize our lender relationships for any reason.

We are in the business for the long term and not for one deal. This means we strive to provide the best products and service to our clients to ensure your referrals. Our team works at the highest level of integrity and confidentiality.