Example Letter of Intent (LOI) Components
- LOI Components. These are the components we highly
recommend a buyer use to communicate their order in detail to the REO
- Dollar Order Amount. Example $USD 20 Million.
- Offering Price. Based on availability and order
amount Buyer offers to pay a "realistic" percentage of the "current
value" of property based on Broker Price Opinion ( BPO ) held by the REO
seller. BPOs are typically less than 30 days old. Pricing is stated
as a range of BPO value. Based upon completed orders Valor can provide
current pricing trends.
- BPO Delivery Range.
Actual BPO value range of the total property portfolio being purchased.
Such as $30.7 Million to $40 Million ($0.50 to $0.65 cents on the
- Property Type. Example: single family residential.
- Price Range ( LTV ).
This is the range of pricing based on current BPO value that the Buyer
is targeting for individual property value. Buyer will be paying a
percentage of this value such as $0.50 to $0.65 cents on the dollar or
50% to 65 % LTV of current BPO .
- Property Condition. Identify the condition of
property you are willing to accept. Example: Minor cosmetic to light
- Occupancy. Provide the occupancy requirements for
the property portfolio.
- Title. Buyer states how they would like to accept
- Proof of Funds. Buyer states the type of funds
that will be utilized: Cash, BLOC, etc.
- Requested Geographical Location. List the
geographical locations and percentages of properties in each location to
be purchased. Use "Exhibits" if necessary to detail locations.
- TAPE Delivery Time Requested. Buyer states how
soon they need the tape, typically between 24 to 72 hours. However, all
orders are filled subject to availability.
- Initial TAPE Review Period Requested. Typically 24
to 72 hours. This represents the Buyer's "free look" period.
- Refundable Deposit: Sometimes requested by
Financial Institution or Government Sponsored Entity when beginning "due
diligence" (takes the property off the market exclusively for Buyer)
- Due Diligence Period: Typically - residential a 3
to 7 days; commercial 20 days
- Closing: Two calendar days after the expiration of
the due diligence period the full amount of the deposit becomes non
refundable. Closing to be coordinated with title & escrow.
- Title: To be determined by the Buyer
- Escrow Company. To be determined by the Buyer. Contact Information A Must!
- Commission: Buyer shall pay 3% (or 4% for orders
under $30 Million)
- Closing Paragraph. This is a brief paragraph
describing your purchase.
Bulk Purchase Process (Countrywide/ Bank of America )
The Buyer submits a current letter of Intent (LOI) and Proof of Funds
- The LOI is made out directly to the bank: Countrywide/ Bank of
- Contains a detailed description of the purchase request
- Includes geographical description of properties wanted by State,
County, City, and Zip Code
- The POF is a current bank letter from the buyer's bank to
Countrywide/ Bank of America:
- Stating the buyer has cash/ cash equivalents in the amount of the
- Is submitted with either a tear sheet or bank statement
- If a Letter of Credit provides for conditions to close an REO
- Is signed by a bank officer
- Provides Countrywide/ Bank of America with the buyer's bank contact
- Provides permission for a designated Countrywide/ Bank of America
employee (to be provided after the buyer returns NCND & NCND Fee
Addendum) to call the bank to verify funds.
The Buyer typically receives the REO portfolio (TAPE) from
Countrywide/ Bank of America within 72 hours.
- Buyer reviews TAPE (Buyer typically receives a 24 to 48 hour "free
- The TAPE will be accepted/declined in total (the properties will not
be "cherry picked").
- Buyer and Seller enter negotiations and agree to a enter into a
- Buyer and Seller open escrow (Buyer's Choice). Typically a 10%
refundable deposit is made at the open of escrow held during the due
diligence period. At the completion of the due diligence period the
Buyer accepts or declines the properties (again, in total) and the
deposit becomes non-refundable. When the Buyer proceeds with the TAPE
purchase, the transfer of money and property occur in the Buyer's
Once the Buyer's initial transaction is completed with Countrywide/
Bank of America, the Buyer can return to the Seller as often as their
business model and market conditions allow.
Importantly, there are several dozen sources for REO residential
and commercial properties to complete a buyer's order as needed. We
provide our buyers the opportunity to purchase in order sizes from $5
Million to $1.5 Billion direct to platform.
We hope this protocol statement enriches your understanding of our
REO bulk purchase process. There is an abundant amount of REO properties
available. However, due to current banking conditions a buyer must be
patient - all the banks are in crisis management and many are under
audit or preparing for audit. Delay's can occur - sometimes a platform
will temporarily shut down due to funding, reorganizations, or emergency
company meetings. Additionally, LOI accumulation can temporarily be
placed on hold due to an audit requirement or slowed due to market
conditions. However, our professionals are actively managing information
and working diligently with REO Sellers to provide our clients with
real product, unparallel options and successful closing results