How much below asking price can I typically negotiate on bank REO commercial property?

There is no universal rule. For properties carried at or near current market value in the bank's accounting, 5-15% discounts are typical. For properties with documented impairments where the bank has already written down the carrying value, the pricing may be closer to current market and less negotiable. The most successful buyers focus on total transaction certainty (as-is, quick close, minimal contingencies) rather than maximizing the price discount.

Do community banks sell commercial REO differently than large national banks?

Yes, significantly. Community banks typically work with local commercial brokers, are more willing to negotiate directly, and have fewer standardized processes. A personal relationship with a community bank's chief credit officer or OREO manager can provide access to properties before formal listing. Large national banks funnel buyers through standardized processes with less personal relationship leverage but also more organized due diligence packages.

Can I get seller financing from a bank on a REO property?

Occasionally, but it is rare for commercial REO. Regulatory constraints limit banks' ability to re-originate loans on assets they are trying to dispose of. In some situations, banks will provide short-term bridge financing (12-24 months) to facilitate a sale at a price closer to carrying value. This is worth asking about but should not be counted on in your acquisition plan.

What is the typical timeline from offer to closing on bank commercial REO?

For straightforward REO transactions, 45-75 days from executed purchase agreement to closing. Larger or more complex properties that require additional bank committee approvals may run 60-90 days. Budget for extensions, bank internal processes are not always predictable, and delays from internal approval chains are common even when the external parties are ready to close.

Are there special financing options for buying bank REO commercial properties?

SBA 504 loans can be used for owner-user commercial REO acquisitions. CMBS and conventional bank financing are available for stabilized REO. For distressed or vacant properties, bridge lenders and debt funds are the primary options. Some buyers use the bank's own short-term financing (when available) as a bridge to permanent financing after stabilization.

How to Buy Bank-Owned Commercial Real Estate