Not every Agent has experience with REO transactions, so there are a few items the Buyer's Agent should know at the onset of the transaction. Passing along this information In Advance will help alleviate tension and will also help the Buyers Agent look good to their client. So here's my list:
1. The Property is Sold AS-IS. If the Buyer will be asking for repairs, please ask for a "not to exceed" dollar figure for any repairs at the time the contract/offer is presented. This may sound like the wrong time to ask - but for the Asset Managers this is the best time, so they know exactly how much they will net from the sale.
2. The Property is Sold AS-IS. As such, a Home Inspection Contingency will most likely be turned down BUT a Buyer's Agent should be sure to add a Professional Home Inspection "For Information Only" -- so the Buyers are fully aware of what they are buying (warts and all). And please do not ask for repairs after the Home Inspection unless Item 1 was added to the original contract.
3. Inform the Buyers Agent which utilities are on and which are off. If the Buyer's Agent wants utilities on during the Home Inspection -- this will need to be approved by the Asset Manager in advance. Additionally, it takes a few days for the approval plus a few more days to have the utilities turned on (if approved). An Asset Manager may say no and then the Buyers Agent can decide if they want to add utilities in their name for the inspection.
4. If Buyers' Agent insists on their own Settlement Company (this is often the case in Virginia), please use someone who is tenacious and who will work with the Seller's Title Company to get this to closing. There are so many REOs right now and so many overworked processors...it's the squeeky-wheel theory.
5. Buyer's Agent should complete a walk-through inspection prior to settlement. Sometimes things happen to vacant properties. As a Listing Agent I have a responsibility to check on my REO Listings weekly, however, there are still 6 other days where something could happen (break-ins, leaks, etc). This is the Buyer's opportunity to make sure the property still has everything they asked for (appliances, light fixtures, etc).
6. Be sure walk-through is completed and HUD items are sent to Settlement Company several days in advance. The Bank will want to approve the HUD1 and that could take 48 hours once the Settlement Company has the figures. (that's 2 business days NOT 2 days)
7. Settlement will most likely be delayed. There, I said it. Be sure the Buyer knows this ahead of time and does not have a moving truck waiting the day of settlement because, chances are, it won't happen on time. That's where the tenacious Settlement Company comes in.
That's all I can think of for now.
Based on your experience, what else could we add to this list to help our fellow Agents?...