8 Simple Rules for Making Offers on Houses That Are “Bank-Owned”

Bank deals are different than private seller deals.

Banks scrutinize your offer much more closely… but there is good news!


Banks (specifically “REO” departments) do a lot of deals. They are in the trenches every day and get “blown off” all the time.

Because of this they are systematic in their approach…

Their “BS meters” are finely tuned…

You are not going to get away with anything.

You MUST do a double closing because they forbid contract assignments, whereas in a private seller deal, you should do an assignment and avoid a double closing.

Banks want YOU to close

A private seller doesn’t care who closes, as long as it closes under the terms initially agreed upon.

So when you are submitting an offer on a house to a bank, there are some differences.

The vast majority of banks will rely on their broker to list, negotiate, and manage the sale of the house… any red flags you raise in their mind, and you are toast.

You Must Play by the Broker’s Rules

I get calls and emails on a regular basis from brokers who’ve received an offer on a property from one of my clients (like you) who’s using my proof of funds and transactional funding. They call me skeptical that the money is really available for my client… so I quickly send them a bank statement, and when they see the proof their guard goes down.

I hear stories all the time about “newbie” investors who are doing it wrong. They use the wrong contract, they use too many contingencies, they call “pre-approved” offers “cash” offers, and so on.

Take a guess at what a broker does with your house offers when they sense that a “newbie” is presenting it?

If you guessed… “THROW IT AWAY” … you would be right!!!

They are experts at the “sniff test”. They get investors making offers on property day in and day out: who make exorbitant claims, but cannot back them up.

This is actually good news for you!

While the majority of investors are doing this the wrong way… you can do it the right way and whip your competition.

You can be new to Real Estate investing, and still look and act like a pro.

How? Follow my lead. I have been doing this a long time and in this article, I am going to show you exactly what to do when making offers on houses that are ‘bank owned’.

These rules are unique to bank deals because private sellers don’t think about these things… they are not “in the trenches” every day.

8 Simple Rules for Making Offers on Houses That Are “Bank-Owned”

  1. Offer Earnest Money

Offer at least $500. The more you put up, the more real you look… especially if you have no contingencies. Usually 1-3% of the purchase price is the agreed upon earnest money deposit.

  1. Be Careful With Contingencies

Use as few contingencies as possible. I always include a title search as a contingency, however. Every buyer should do that, on every deal. This is customary. This tells you that there are no outstanding debts, judgments, or “clouds” on the title. The rest (home inspection, partner approval, etc.) are frowned upon and make you look like a “newbie”.

  1. Use THEIR Contract

Brokers want you to use THEIR form, not yours. If you make it easy on the broker and they like you, they may have other deals around the corner for you. And don’t ask them to send their blank contract to you. This makes you look like you have never done a deal. You should look for the local Realtor Board Contract online and send it along with your “proof of funds” on your first offer to buy. And if you are a little nervous about using a big contract like this, I have created a training program called “The Purchase & Sale Agreement Line by Line” to help you understand it. You can find more information at CameronDirect.com.

  1. Make Sure You Have Proof of Funds

If you can’t prove your ability to close, the broker will not submit your offer to the bank. They are the gatekeeper for the bank and everyone is busy.

You need to include “Verifiable Proof of Funds” with your offer; which tells them that you are able to do, what your offer says you can do.

If you have cash in your bank, in a retirement account, or any other place, print up your most recent statement, “black out” your sensitive info, and then include that with the offer to buy the house. This is what a broker is hoping to see.

If you do not have the cash, then you will need to line up some funding. If you would prefer to find local private lenders who will give you a great rate, you can find known private lenders in your area, and all across the USA using my Private Lender Data Feed.

Or, if you are limited on time, you may want to check out my REI Trifecta Program where I will provide you with funding (and everything else you need to make quick cash).

  1. Shoot For A 30-Day Closing

Some banks vary a little, but 30 days is the sweet spot. Banks want to know that you can close quickly (while giving them enough time to get their “ducks in a row”). They use systems to make the process easier for them to dispose of their REO properties. Make an offer for 30 days, but be flexible in case they ask for something different.

  1. Expect Addendums

Each bank has their own set of rules. The best way to make an offer on a house is by using the local Real Estate Board approved contract because that makes the broker happy. But, that doesn’t mean that the bank is satisfied. They have processed thousands of these transactions and they know what is important to them and what is not.

So they have created their own contract which rides along with and supersedes your contract. This is what is known as an “addendum”. This is especially true when you are dealing with a major bank like “Bank of America” or “Chase”. They are lending and foreclosing all around the country, and they are getting offers from investors in all 50 states. Each state has several Board(s) of Realtors which means there are hundreds of different contracts.

The asset manager does not have time to read through each of them to make sure that there is no sneaky or otherwise unwanted language. So, they created their own addendum form and tell you that you have to abide by it, or they will find another buyer who will.

READ THE ADDENDUM! Then if there’s any question about what it says, ask the Real Estate Agent for clarification.

  1. You’ll Be Buying The Property “As-Is”

Banks will not make repairs after you get a deal with them. Their addendum will make you purchase the property “as-is”. I wanted you to be aware before you submit an offer on a house though, because I have seen many investors attempt to re-negotiate with the bank after a few days of putting the property under contract. That won’t fly! Include some margin in your offers in case you find something “behind the walls”, etc. after closing. If you are wholesaling the property, you don’t need to be exact on repair estimates anyways.

  1. Avoid Using “And/or Assigns”

Using “and/or assigns” is the fastest way to show the broker that you are “new”. In private seller deals, you would ordinarily include language in the contract that allows you to assign it. In bank deals, it’s a BIG ‘NO-NO’!

When you’re wholesaling you have to do a “double-closing” for foreclosure properties. You will incur extra closing costs, but the margins on bank deals make it worth it!   Plus, if you’re using my “no fee” transactional funding, those costs are greatly reduced.

Just be sure you are making offers according to my formula and you will be good to go. But whatever you do… do not attempt to make the contract “assignable”. Rather, plan to close on the property in the name of your entity and sell it same day to your cash buyer.

Take a peek below… and learn how to get access to my funds so you can do more deals.

Now that you are aware of these 8 rules, you will be making offers on a house like a pro and you won’t make the same mistakes that most investors make when learning how to deal with each type of seller.

Private sellers tend to believe whatever you say… banks tend NOT to believe whatever you say. You need to PROVE it!!!

If you don’t have the ability to prove it, let me give you the ability…


Discover How to Whip Your Competition & Cash Checks Fast By Following the Most Direct Line to Profits Available Today!

I will give you all the tools and training you need to make quick cash in Real Estate. This is exactly what I wish I had when I was getting started. I have spent decades fine-tuning my Real Estate investing business and every time I create something that works, I make it available to my clients… AKA ‘my extended family’.

I will show you:

  • How to Get Unlimited “Proof of Funds” Letters Backed by Me Personally
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9 thoughts on “8 Simple Rules for Making Offers on Houses That Are “Bank-Owned”

Cam, being able to perform (close) is always a concern for us newbies. Proof of Funds letters are great. However, it takes a significant upfront investment to participate with you. It sure would nice if this was waived until the first deal is done and then collect your fees for your program. After all, your already very successful right? I heard the ole phrase that by investing upfront you weed out the wannabes. There are a lot of us wannabes who want to make the transition to professional investor level. Please consider what I am suggesting.

Your suggestion is a great one but sadly, is completely unrealistic. I could not remain in business if I gave the program to everyone that asked for it for free, especially since going to the “No Fee Funding” model.

The unfortunate reality is that when people have nothing invested they tend to do nothing. I have spent my entire career being saddened by this and other similar realities that are plaguing us as a society.

We have a 2 payment option that helps make the program a reality for a lot of people. Perhaps that will work for you.

I can appreciate your position. Just paid for the mentor program and I am looking forward to working with Clinton.

Thanks for all your advice. My question is that when a state such as mine requires a 90 day hold on REO:
Buyer cannot market or sell the property for 90 days after purchase
What type of contract or strategy do you suggest?
I’d like to, in a way, sell (have a contract between us) the property to my buyer on my closing day or ASAP
They start work on the house and after 90 days it’s transferred to their ownership.
This 90 day limitation is preventing me from grabbing so many REOs!

That’s not a state thing. It’s a seller thing and you’re probably talking about Fannie Mae. If so, read the language because it likely only applies if you’re selling for more than a 20% profit.

Our experience tracks with what Cameron just stated about FNMA. Our realtor in LA told us our offer to sell (on B-C side) had to be less than 120% of our A-B side purchase. As Cam said, stay below that 120% threshold and you should be ok.

What do that mean less then 120% then the A TO B ….WHEN DOING A——– B TO C , DEAL

If you’re buying it for (say) 100k and selling it for 119k you’re good. If you’re buying it for (say) 100k and selling it for 125k you’re not.

Nice Blog Cam, you always deliver great right to the point helpful info that an investor can make more money with.


Bart Corrie
RhinoOne Real Estate Investments LLC

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