WHY DO OWNER BANKS AND LISTING AGENTS MAKE IT SO HARD TO BUY A FORECLOSURE?

By
Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372
http://actvra.in/9vy

DO REO BANK OWNERS READ LISTING REPORTS?
DO REO LISTING AGENTS WANT CO-OP SALES?

WHY DO THEY MAKE IT SO HARD?

I'm previewing a selection of bank owned potential FHA 203(k) properties today.  A smart buyer couple is interested in buying a property that would offer INSTANT EQUITY with FHA 203(k) financing.  The first place I go for 203(k) buyers is to the available REO properties.  First of all, to the owner/seller, these properties are not homes.  The properties are "inventory" and discounted, often significantly from market.  Also, I have a relationship with a loan officer who plays the FHA 203(k) loan like Itzhak Perlman plays the violin.

Step 1.  Previewing the properties is usually easy. 
Step 2.  Showing the properties is usually easy too.
Step 3.  Making an offer. . .  NOT SO EASY.


JUMP THROUGH HOOPS.  That's what some sellers and their listing agents require of a buyer to just make an offer. 

INSTRUCTIONS FOUND IN LISTING REPORTS THIS A.M.

SUBMIT OFFERS TO:
 WWW . XXX . com.
Buyers must be submitted to a web site URL.
Buyers must be pre-approved by XYZ Mortgage Company listed in the MLS listing report.
Offers must be accompanied by earnest money in a Cashiers Check made out to the listing broker.
Buyers are responsible for utilities for home inspection.
Buyers must be pre-approved with loan commitment letter.
Offers by e-mail only.red flag
Offer instructions:  See web site (no web site address).
Contact listing agent by e-mail only.  Incompatible e-mail link.
Buyer pays for condo docs.
Commission may change.
Watch out for mold.
Send offers - response in 2-3 days or more.
Joint venture (bank and N.A.C.A).  Well that's a red flag.

THESE PROPERTIES ARE USUALLY A GOOD BUY.  Not that buyers always understand the dynamics of price/value, they usually do not.  No matter what the list price, most buyers are still inclined to want to negotiate, negotiate, negotiate.  Fine with me.  The problem is that with so little communication or it may be impossible to communicate with the listing agent, often the only thing we can do is write.  Now, on a normal listing, I rarely have to speak with an agent prior to writing.  I am inclined to write and deliver the original offer to the listing agent's office.  That's rarely possible and certainly not encouraged today with REO listings

I KNOW LISTING BROKERS WHO ARE CARRYING HUGE NUMBERS OF LISTINGS.  They are smart to automate their listing procedures.  However, are they smart to take themselves out of the line of communication when a buyer wants to buy a foreclosed property?? 

WHO BENEFITS WHEN THE PARTIES DON'T COMMUNICATE?  I wonder if the Days on the Market might be reduced and the ultimate sales price and net proceeds to the seller (bank) might be more favorable if the process to sell REOs more closely resembled a regular sale. 

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.

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Re-Bloggged 7 times:

Re-Blogged By Re-Blogged At
  1. Judi K Barrett 05/07/2011 07:54 AM
  2. June Piper-Brandon 05/07/2011 10:22 AM
  3. Judy Buchan 05/07/2011 03:54 PM
  4. C. Lloyd McKenzie 05/07/2011 11:48 PM
  5. Pamela Seley, REALTOR® 05/09/2011 07:29 PM
  6. Suzanne McLaughlin 05/22/2011 05:43 PM
  7. Daniel H. Fisher 07/18/2011 11:59 AM
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Tags:
fha 203k loan
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Comments 150 New Comment

Rainmaker
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Las Vegas Realtor® Listing Agent Dawn Barrier 702-812-4550
Las Vegas Homes For Sale
Prominent Realty Group, LLC

Lenn,  You are most likely right, makes me think about that is right on the same thought as Broker Bryant's post... NAR's Success With Keeping Banks Out Of Real Estate.......Really?

May 10, 2011 04:48 PM
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Lenn Harley
Real Estate Broker - Virginia & Maryland
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate

Dawn.  Hi.  I read that and he's right.  We've been saying that for several years since the Short Sale nightmare began.  We're used to the REO processes although they have become more troublesome.  Sadly, the skill level of the average real estate agent has, IMO, deteriorated which has given banks clout to demand that they direct the course of the procedure more than in the past. 

May 10, 2011 06:07 PM
Rainmaker
332,633
Sylvie Stuart
Home Buying, Home Selling and Investment - Flagstaff, AZ
Keller Williams Check Realty 928-600-2765

Great post! I completely agree. It's tough representing a buyer and explaining all of these requirements to them, especially first time home buyers which is often the case. Lots of hoops to get a good deal.

May 12, 2011 12:51 PM
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Lenn Harley
Real Estate Broker - Virginia & Maryland
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate

Sylvie.  Home buyers do NOT have a clue. 

May 13, 2011 06:10 AM
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Lenn Harley

Real Estate Broker - Virginia & Maryland
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