Do Banks Really Want to Sell Their REO Homes?

By
Real Estate Agent with Atlanta Communities Real Estate Brokerage GREC #208281

 Many buyers are looking for a deal.  Georgia is third in the nation in foreclosures so you would think that banks would do their best  to get their REO homes sold.  You would also think that banks would demand the best services from real estate agents in order to maximize the amount they can salvage from a bad situation.  They are professional business people, aren't they?

My typical experience with helping buyers pursue foreclosures is usually one of frustration.   In my city, there are maybe 4 agents who get most of the bank foreclosures to list.  They are REO listing specialists. From the few closings that I have had with them, they seem to get a full commission.  From my perspective, it seems that they do as little as possible.  I often wonder why a bank would pay full price for such little service.  So am I must be missing a key piece of information?

First, the listing usually has only one picture of the house.  It's usually not a very good one.  Many of the listing remarks are the exact same comments that are used for every single home.  Usually something about being sold as-is, where to fax offers, and maybe something about serious offers only.

The homes are always in terrible shape.  Sometimes it's just dirt and dead bugs.  How much would it cost to clean it up just a bit?  Do the banks not know that a clean home will sell for much more?

Forget about trying to get the listing agent on the telephone in person.  If you are lucky, you might actually get a live person on the telephone who will only be able to tell you if it is still available and where to fax an offer.  Most of the time you'll get a message machine and probably will never get a return phone call.

When you fax over an offer, usually you won't get any confirmation that it was received.  You'll be able to leave a  message but who knows if anyone will ever listen to it.

Forget about any quick response.  Usually 48 hours is the turnaround time.  If it's a Friday afternoon, it's probably going to be Monday afternoon before they look at your offer. 

One would also think that a quick closing would be desirable for the bank. I once had a cash buyer who wanted to close in seven days.  I was once told the bank needed at least 21 days to process it through their system. Seven days was totally unacceptable.

I know it's not only me who runs into these problems.  I get buyers who call me to recruit my services because they just can't get anyone to call them back when they call the listing agent directly. 

So what am I missing?  To me, there  seems like a great opportunity for an agent to provide better service to banks in the sale of their REO homes.   Is that market completely different than the average retail market or do banks really don't care about getting top dollar for their homes? 

 

 

Posted by
About the Author:  Tim Maitski has been a full time Realtor since 1999. He has sold several hundreds of homes in areas around metro Atlanta.  Tim started with RE/MAX Greater Atlanta and is now with Atlanta Communities Real Estate Brokerage.

Along with blogging on ActiveRain, he provides one of the best real estate websites in Atlanta at www.HomeAtlanta.com where he has market price charts of 37 areas around Atlanta with data going back over 10 years.  His online Property Tax Calculator allows you to compare property taxes in many counties and cities around the Atlanta area.  He provides the Atlanta MLS Power Search Tool that allows searches of homes using over 35 specific criteria.

A visit to Tim's  YouTube Channel will make you see why RealtyBizNews.com says that "Tim Maitski may just be America' most vocal real estate professional"

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Tags:
reo
banks
foreclosure
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Anonymous #45
Anonymous
thecleanhouse10940@yahoo.com
THIS IS A VERY INTERESTING DISCUSSION. I'VE BEEN CLEANING PRIVATE HOMES AND OFFICES FOR SEVEN YEARS AND I'M JUST NOW GETTING INTO FORECLOSURES AND SHOULD BE STARTING MY FIRST THIS WEEK. MY BOYFRIEND AND I WILL BE RESPONSIBLE FOR THE CLEANING, INCLUDING GARAGE AND SHED, "SECURING THE PROPERTY", WHICH IN THIS CASE IS BOARDING UP AN OLD RICKETY POOL GATE AND COVERING THE AIR CONDITIONER OPENING, TAKING AN OLD ABOVE GROUND POOL DOWN THAT HAS A SMALL TREE GROWING RIGHT THROUGH THE LINER, AND REMOVING IT FROM THE PROPERTY AS WELL AS ANY TRASH AND ITEMS LEFT BEHIND BY THE OWNERS, LANDSCAPE AND LAWN CARE WHICH IS CUTTING AND WEEDING THE GRASS, AND MAINTAINING THE PROPERTY UNTIL IT SELLS. WE ARE OUT OF ORANGE COUNTY NEW YORK AND BERGEN COUNTY NEW JERSEY IF ANYONE IN THE AREA NEEDS OUR SERVICES. WE ALSO PAINT AND STAGE TO SELL. 
September 24, 2007 09:39 PM
Anonymous #46
Anonymous
Kit

Hi Daniel Travino,  did you get any calls on how to service REO properties?  I am interested in servicing REO's in Northern California area.  Email me at mkerr@comcast.net if you have any luck.

May 06, 2008 10:18 PM
Anonymous #47
Anonymous
Janice Gatlin

Hello All,

We specialize in REOs in 2 states: Calif and Nevada.  We love our reo's. They are a tremendous amount of work and very costly to maintain, but being given a property that is guaranteed to sell (they'll drop the price until they sell) is a great gift in this market.

We take great care of our reos. In the season, lawns are green and yards weeded. The nteriors are always cleaned, utilities on and we answer our phones, always!!  We advertise, have lots of photos, hold open houses, always have signs and brochures out.

We have a long list of agents awaiting each new REO we get because we take great care of themand we're very easy to work with. We also have a strong rapport with our asset management companies.

Other points: Lots to know if you want to be an reo agent. We have 18 years experience.  BPOs aren't cma's. You can get the price you want if you know how to work the bpo and the asset manager knows you.

Yes, typically, only a few agents get the reos in each area. Most all banks/asset management companies like to work with as few agents as possible and load them up, up to 100 properties per bank per agent.

Pretty much all the reo sign ups are closed now due to the great demand. But some still allow waiting lists. Before you jump in though, you need to know how to do bpos and all the rest of what is required.

By the way, in our states and for our clients (WaMu, Chase, Deutsche, EMC, US Bank,++), the ppties go through assest management companies who generally take 30% off the listing agent's commission and that commission is generally 2.75-2.5%, not the typical 3% paid in CA and NV

It IS the agent most of the time if you're looking at a dirty property and not getting a quick response.

February 18, 2009 04:52 AM
Anonymous #48
Anonymous
brandon

I got a offer accepted on a REO owned byFreddie Mac, but I close in a week and there are structural problems that are estimated at 10k plus to fix. The agent for the bank says they are getting second bids. My question is how likely is the bank going to pay to fix this problem prior to closing?

September 30, 2009 08:19 PM
Anonymous #49
Anonymous
Coy860

Here is my view as a potential buyer:  I have found a wonderful REO, and find the bank horrible to work with.  My first offer was countered at 500. less than asking price.  This is not your ordinary REO, the asking price is 384,500.  We finally agreed on price, and received the addendum to the contract, all blanks left empty.  We were instructed to initial or sign each page, leaving the BLANKS blank.

That is a no no and we refused and withdrew our offer.  How does one actually get to a closing in a situation like this?  My buyer's agent had no answer, and the listing agent insisted we sign the blank pages.

HELP

November 16, 2009 02:59 PM
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