Wholesaling REO Bank-Owned Properties in Tennessee

The short answer

Can you wholesale a bank-owned property in Tennessee?

Often yes, but many bank contracts limit or ban assignment, so you must read the REO addendum first. When assignment is allowed, Tennessee wholesaling disclosures still apply.

A bank takes title after a foreclosure sale and hands the house to an asset manager. That manager sends a standard purchase contract and often an addendum. Some forms bar assigning the contract. Others allow it only with written consent. Read every page before you sign, and ask the listing agent plainly. Our assignment guide explains the mechanics.

Tennessee’s wholesaling law, found at T.C.A. 66-4-401 to -403, says a buyer who assigns for a higher price should disclose in writing that it may market its interest. That disclosure goes before the contract is signed, in bold, large print. A notice of the assignment date is due at least three business days before it takes effect. Banks may have their own rules on top. Our legality guide covers the basics.

The opportunity

Why REO deals work in Knox County and beyond

Knoxville has steady demand from students, medical workers and families moving in for Oak Ridge and the university. Bank-owned houses in Knox, Blount and Anderson counties often sit dated and dirty after a long foreclosure. Banks price them to move, not to wait for the perfect buyer. A wholesaler with a ready list of cash buyers can bring a bank an easy closing. Use a buyer buy box so each house goes to the right investor.

Lead sources

Where to find REO leads in Knoxville

• MLS listings. Bank-owned homes are usually listed by an agent. Watch for new REO tags in Knox County.
• Trustee sale results. Track which sales ended with the lender taking the property. Our auction guide shows how.
• Register of Deeds. A trustee deed to a bank signals a new REO. Check the Knox County register weekly.
• Asset managers. Introduce yourself by email with proof of funds or a buyer list.
• Off-market REO. Some banks sell quietly to known buyers. See our off-market guide.

Your exit

Who buys Tennessee REO deals

Fix-and-flip investors buy most REO houses. In Knoxville they like Fountain City, Inskip and South Knoxville, where dated ranches still sell well after rehab. Landlords like the same streets for rentals. Send each buyer a one-page summary with repairs, comps and your price.

Closing speed matters to banks. A buyer who closes in two weeks with proof of funds beats a higher offer that needs financing. Pair your buyer with an investor-friendly title company that knows bank closings.

Step by step

How to start wholesaling REO bank-owned properties in Tennessee

1. Study the bank rules. Request the REO addendum before you offer.
2. Pull comps. Use our ARV guide and the ARV calculator.
3. Estimate repairs. Walk the house or review photos with our repair cost guide.
4. Set your number. Run the MAO calculator with your buyer’s margin.
5. Disclose in writing. Put the wholesale disclosure in bold, large print in the contract.
6. Send the assignment notice. Give notice at least three business days before the assignment takes effect.
7. Close. Collect your fee at closing through title.

A bank listed a dated three-bedroom ranch in Fountain City at $185,000 after a foreclosure sale. It had sat 60 days. You made an offer at $164,000 with a fast close and a clause saying you may assign the contract.

The asset manager approved assignment in writing. You sent your buyer’s name and the notice date four business days ahead, and your contract had the bold disclosure at signing.

A rehabber paid $9,500 for the assignment, closed in 14 days and put $48,000 into the house. You never owned it, and you never listed it.

Tennessee rules to know

Foreclosure notice, taxes and brokerage rules

Tennessee foreclosures are non-judicial. The sale notice must run in a county newspaper at least twice and be posted online for 20 continuous days, with the first newspaper run at least 20 days before the sale. A trustee deed to the bank starts the REO. A right of redemption can exist by statute, though deeds of trust commonly waive it. Check the file and ask counsel.

A deed carries a recordation tax of $0.37 per $100, paid by the grantee. A pure contract assignment is generally not a deed, but confirm with counsel. Acting as a broker without a license is unlawful under T.C.A. 62-13-301. Describe yourself as a buyer with a contract, not as a listing agent. See our attorney guide.

Learn it with a mentor

Get help with bank deals

REO paperwork trips up new wholesalers. Mentorship students bring us bank addenda and we walk through the assignment language line by line.

FAQ

REO Bank-Owned Properties in Tennessee: common questions

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