Ask Cornerstone: I want to bid on an auction, but I can’t go see it because it says “REO Occupied. Do not disturb tenant.” Should I stay away from these types of properties?

REO House Auction

Okay, so the bank owns the real estate… If the property is occupied, firstly, of course it doesn’t mean you can’t go see it from the outside.   If the property is really bad on the outside, it’s usually bad on the inside.

You minimize your risk because it’s always good to see it from the outside so you can both get an idea of how it’s like on the inside, plus you need to assess the neighborhood anyway.

Here is a secret tip for trying to see the inside.   Bring a $10 Starbucks gift certificate.  Talk to the occupant. Be really polite.  Say something like this, “Here’s a $10 gift card.  I’m looking to purchase this home.  I’d appreciate if you can answer some questions and maybe let me take a quick look inside.”

Offer them the card first… not explicitly as a condition of letting you in, just as an ice breaker.  They will probably give it back if they don’t want to talk to you, but that’s not important.

If you couldn’t see inside, then you’ll have to bid as if you have to do everything to the house (carpet, paint, new kitchen, new bathroom… etc.).

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