Whether you are a buyer wanting to purchase or an asset manager looking for quality service with a proven track record, Garth Johnson and his team at Minnesota REO Experts are here to assist you!
Garth Johnson has been a Minneapolis area agent for over 25 years. Ranked #1 agent in 2009 and #2 agent in 2010 with over 1100 sales, with an experienced team that strives on professionalism learn more About Us, your professional Minneapolis Realtor.
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Frequently asked questions
1.) Is it true that because this is a bank owned property it can be purchased for pennies on the dollar?
No, this is absolutely false. Just like any other seller, the list price is what they want for the property. With most properties there are PMI companies, and bank investors involved that will not allow the bank to sell the property for very much below appraised value. The mortgage insurer, bank, bank investors are well aware of a property’s value and condition. In addition to Automated Valuation Systems now available, they usually have several appraisals and/or CMA’s completed and that is how the seller arrived at the list price.
2.) Are there any disclosures for this property?
No, the property was acquired through foreclosure. The seller and seller’s broker have no prior knowledge of the property and it is sold AS-IS. They will require a waiver of disclosure which is attached to the PA instructions. Except any city required, well-septic, etc.
3.) We are submitting an offer. How long before we hear anything back?
Response tome is usually 24 hours, but because this is a corporate owned property a committee may have to meet to review the offer. This can cause response time to vary from 1-14 days. The listing agent will contact you the moment we receive a response. Seller only operates during normal business hours and will not respond on weekends or holidays. Offers received at these times will be submitted on the next business day.
4.) How do we submit an offer?
Follow instructions in the listing supplement and be sure to read them carefully. Incomplete offers will not be submitted. If you are not an agent, contact your buyer’s representative or listing agent.
5.) Why was our offer rejected with no counteroffer?
The seller maintains a large portfolio of properties all around the country and is negotiating hundreds of properties at a time, the seller often rejects offers with no counteroffer. If your offer was rejected and you still have interest in the property, submit a new offer
6.) Will the seller accept an offer contingent on the sale of a home?
Offers contingent on the sale of a home are not accepted. Seller rarely allows more than 30-45 days to close
7.) How much earnest money will the seller require?
2% with a minimum of $1,000 whichever is greater, normally in the form of a cashiers check
8.) Will the seller complete any repairs?
All properties are sold AS-IS and normally the seller will not complete any repairs
9.) What forms do we need to submit an offer?
Follow instructions in the listing supplement carefully. If the seller is interested in your offer they will draft a counter offer addendum which will supersede the original PA
10.) Will the seller accept an offer with 100% financing?
Yes depending on the loan program. Banks are hesitant to accept 100% financing due to statistics that show these loans have a higher incidence of no final underwriting approval until the last minute, not closing on time, or not closing at all. That in addition to recent changes in the sub-prime market may make sellers hesitant to take such an offer. If you do have a buyer that is purchasing with no money down please include a buyers financial disclosure statement with your offer and as with all offers, be sure to submit the lender questionnaire. Any additional information about the purchaser including credit score, employment history etc. will increase the chance of 100% financing being accepted. Most loan programs with minimum payments start at 95-97% LTV.
11.) Will the seller pay for any closing costs?
Yes, depending on the offer price and other offer terms. Many sellers will not pay closing costs on Cash offers or on Investor offers.
12.) Does the seller ever sell homes in repaired condition?
Yes, Some sellers will make cosmetic repairs but most sellers prefer not to complete major repairs.
13.) How do we deal with multiple offers?
Always bring your best offer. Once an agreement is fully executed and ALL contingencies are removed, we will “pend” the property and stop showings. Until all contingencies are removed, we will accept back up offers. Send in your offers, get signatures, and remove contingencies promptly as we are required to continue submitting offers until all loose ends are tied up, and the client may accept another offer right from under you if everything is not executed!
14.) If the property is winterized?
We will de-winterize for an inspection depending on the property condition and if approved by the seller. Sometimes the buyer must assume this.
15.) Is the value of the home the same as the tax value or what is owed on the mortgage?
No – it may be substantially different. Do not rely on the tax value to determine value.
16.) How does the seller determine the list price?
The client has 2 realtor opinions or a formal appraisal done prior to listing, which is how they determine their price
17.) Will the bank finance the sale?
The client will normally not finance the sale. New financing is required; the client does not offer any seller financing or carrybacks. Sometimes they will offer special NEW financing inventives, but this is done through a normal loan process. However, some lenders do want to originate new financing through their company.
18.) If there are title defects, who has to correct them?
The seller is responsible to correct them before you close
19.) Personal property is not included in the sale.
The buyer will not receive a bill of sale for the personal property. The client will not allow any personal property in the purchase agreement, so tell your client to assume that they are not included. If there is other personal property, it may or may not there at closing, but do not assume that it will be removed unless specifically stated in the purchase agreement.
20.) Closing dates should be between 30-45 days from acceptance.
If you set a closing date further out, the client will most likely counter it with a sooner closing date, so if at all possible, set closing dates during this time frame, preferably 45 days to give time for negotiations although they may counter with less. Some clients cannot and will not close more than 30 days out no matter what the offer is. If there is a delay between the time you submit your offer and your offer is finalized and you feel you cant meet the closing date, submit an amendment with the counter offer when you return it. Do not wait.
21.) Counteroffers will be submitted verbally or electronically (via email or fax)
Please respond promptly via fax or email. I prefer to have all counters, even if its scribbled on a fax coversheet, in writing so that I can place it on file and keep track of where things are at. Once the general terms are agreed upon the client will normally send a counteroffer addendum with their own specific language, which will need to be signed and returned along with the originals of the purchase agreement and earnest money check ASAP. These addendums are not negotiable. We do not consider the property under contract until all signatures are received from both parties, so please get these items to us immediately
22.) Some lenders require that you get pre-approved through their company as a condition of sale.
This does not mean your buyer must use that company, but the client may require a pre-approval through their company. If you client is not willing to do this, their offer may not be accepted. If they do end up using that company, there may be special incentives such as a free appraisal for your buyer.
23.) Can you just run a verbal offer by the seller?
No verbal offers will be considered or responded to. Everything must be in writing for the seller to consider.
24.) Once an offer is verbally accepted, deliver originals promptly.
Originals of the purchase agreement and the earnest money must be delivered right away. We must continue presenting offers until we have a fully executed contract. I normally must overnight the originals to the client so any delay in delivering originals could result in another offer being accepted in interim.
25.) The client will require per diem of the closing is delayed.
Please advise your client that the seller will require pre diem penalty if the closing does not happen on time at the buyers fault. The per diem amount may be more than $150 per day so please read the contract with your client carefully once it arrives.
26.) Please advise us of any issues at the property such as vandalism, damage or items you think we may not be aware of.
These properties are targets for break-ins and vandalism, and even though we inspect regularly, if an issue does come up, we might not know about it right away unless you tell us. We prefer to have the shades drawn, etc. Please make sure all windows and doors are locked securely.