New York situation guide · Updated November 2026

Wholesaling REO Bank-Owned Properties in New York

Wholesaling REO bank-owned properties in New York means getting a lender-owned house under contract and then passing the deal to a buyer, where the bank’s rules allow it. In Rochester and Monroe County, banks sell through asset managers and often limit assignment, so the contract language decides what you can do.

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The short answer

Can you wholesale REO bank-owned properties in New York?

Sometimes. A bank-owned house in New York can be assigned only if the bank’s contract allows it, so many REO wholesalers use an option, a double close or a buyer list instead. Ask a New York attorney to read the bank’s addendum before you sign anything.

A property becomes REO when a foreclosure ends without a third-party buyer and the lender takes title. In Monroe County the bank then hands the house to an asset manager, who lists it with a local agent. The agent usually requires an offer on the bank’s form, and that form often bars assignment. Read our REO properties guide before you bid, and see how the earlier steps work in how foreclosure auctions work.

New York foreclosures are judicial, so the bank has already been through court. CPLR 3408 sets a settlement conference within 60 days after proof of service is filed, and RPAPL 1304 requires a 90-day notice before a home-loan foreclosure starts. Check current text for both. By the time a house is REO, those steps are behind it, but the bank may still ask for proof of funds and a quick closing. Your edge is a ready buyer, not a contract trick. See the off-market properties guide for ways to find them early.

REO Bank-Owned Properties in New York at a glance

Seller	A bank or servicer, usually through an asset manager
Contract form	The bank’s own addendum, often limiting assignment
Closing	Attorney-led, with deposit held by an attorney
Disclosure	Lender sellers often sell as-is; check current rules
Transfer tax	Seller normally pays; a double close repeats it
Foreclosure notice	RPAPL 1304 90-day notice before suit; check current text

The opportunity

Why REO deals can work around Rochester

Rochester has older single-family houses and two-families in neighborhoods such as Beechwood, the 19th Ward and Charlotte. Long foreclosure timelines can leave homes empty and tired by the time the bank owns them. Banks want a clean, fast sale at a fair number, and they dislike carrying taxes and winter heat bills. A buyer with cash and a short closing can win a house that a retail buyer with a mortgage cannot.

Carrying costs

Banks pay for taxes, heat and insurance, so a fast close has real value to them.

Condition gaps

Winter damage in vacant homes can scare retail buyers and help cash buyers.

Repeat sellers

One asset manager may list many homes, so a good record can lead to more offers.

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Lead sources

Where to find REO leads in Rochester

Agent listings. Bank-owned homes appear on the MLS, and many asset managers use the same few local agents.
County records. Monroe County deed filings show a lender taking title after a sale.
Vacant-house drives. Boarded or winterized houses can signal bank ownership. See our driving for dollars guide.
Asset-manager lists. Some managers accept investor registrations and send new inventory by email.
Agent networks. Ask listing agents which buyers close fast. Our cash buyer guide helps you build that list.

Your exit

Who buys REO deals in New York

Rehab investors, landlords and small contractors buy most REO houses in Rochester. They care about the repair bill, the rent roll and how soon they can get keys. A buyer who has funded in the last month tends to move fastest.

If the bank bars assignment, a double close can work, but it adds a second set of closing costs and transfer tax. Read our double closing guide and discuss it with the bank’s counsel early. Some banks refuse it as well.

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Step by step

How to start wholesaling REO bank-owned properties in New York

Find the listing. Pull the address, the asset manager and the agent. Note days on market.
Pull comps. Use the ARV calculator and the ARV guide.
Estimate repairs. Walk the house and use the repair cost guide.
Set your price. Run the MAO calculator with your buyer’s margin.
Read the addendum. Look for assignment limits, proof-of-funds rules and any as-is language.
Submit the offer. Send it through the listing agent with proof of funds or a lender letter.
Close with attorneys. Both sides bring counsel; a title company that knows investors can help.

Your checklist for wholesaling REO Bank-Owned Properties in New York

Get the full bank addendum before you make an offer.
Confirm whether the contract bars assignment or marketing the property.
Order a title search and check for open code or tax items.
Line up a funded buyer before you go under contract.
Ask a Rochester attorney to vet the plan before you sign.

A New York example: a bank-owned two-family in Rochester

List price	$118,000
Accepted offer	$96,000
Estimated repairs	$38,000
Repaired value	$195,000
Buyer fee to you	$7,500
Time to close	About 35 days

A lender-owned two-family on a side street in the 19th Ward of Rochester sat on the market for 60 days. The asset manager wanted a quick sale before the next tax bill. You walked it with a contractor, who priced repairs near $38,000.

Repaired comps nearby ran close to $195,000. You offered $96,000 on the bank’s form, which allowed a buyer to be substituted with consent. A local landlord who had closed two deals that spring agreed to the numbers.

The bank approved the substitution, and attorneys closed in about five weeks. You earned a $7,500 fee. The landlord finished the rehab and rented both units.

New York rules to know

Foreclosure rules and assignment limits

We found no enacted wholesaler law in Rochester or Albany, and the bills now moving are only proposals. Selling the bank’s own house, which you do not control, is where brokerage questions arise. A signed bank contract that lets you step aside for a buyer is a safer footing. Read the current Real Property Law licensing article and let a New York lawyer judge your plan.

The equity purchaser rules in RPL 265-a speak to occupied homes in default, which is the stage before a bank owns anything. If you approach a borrower earlier, those rules matter. For the REO sale itself, lenders often sell as-is, and RPL 465 reaches only willful disclosure failures. Confirm what applies to your house. See our attorney guide.

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Work REO deals with backup

Bank paperwork can be slow and strict.

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FAQ

REO Bank-Owned Properties in New York: common questions

Is wholesaling REO bank-owned properties in New York legal?

It can be, when the bank’s own contract lets a buyer take your place. The legal risk sits in acting as an unlicensed broker for a house you cannot sell yourself. Read the current licensing text, keep your marketing modest and have counsel review the bank addendum first.

Can I assign a contract on a bank-owned house?

Only if the bank’s addendum permits it. Many REO forms limit or bar assignment. If it does, you can ask for consent, use a double close or pass on the deal. Never hide your plan from the bank. Ask in writing.

How does foreclosure reach REO in New York?

New York uses judicial foreclosure. A lender serves notice, the court may hold a settlement conference under CPLR 3408, and if no buyer wins the sale the bank takes title. Timelines vary a lot, so check current rules. Dates can slip.

Do banks disclose condition on REO sales?

Bank sellers commonly sell as-is. The Property Condition Disclosure Act has exemptions and penalizes only willful failure under RPL 465. Inspect the house yourself and ask your attorney what applies. Plan your own inspection and budget for repairs before you set your fee.

Who pays transfer tax on an REO sale?

The seller normally pays the state tax, which works out to $2 for each $500 of price, so a bank usually carries it. A double close would trigger it twice. Ask the closing attorney for local add-ons before locking your fee.