REOs… A Diamond in the Rough… or a Nightmare!

By
Real Estate Agent with America's 1st Choice RH Realty Co., Inc.

I am told by some lenders that the "new frontier" is nestled in REO properties.  They say that foreclosure rates have opened a huge inventory in this sector and as a Realtor I should get more involved with them.

 I've researched this topic and have found it difficult to break in and get access to REO properties.  Of course, there are sites out there that will gladly give me REO leads... for a price (and whether I get them or not.. and whether I sell them or not).  At this point, I don't know how agents get them... but I'm still looking.  Any advice here?

 I have talked with agents who have worked REO properties and I'm told that their commissions have been reduced as well as third party "handlers" that take a percentage of the commission.

 I have represented buyers of REO properties.  More nightmares!  Their addenda are full of restrictive language, penalties for buyers, and more!  I even countered a bank addendum only to get a flat no!... My client did not like their language and wanted it changed to be less harmful to them.

 I have had a buyer walk away from a property because language found in the addendum.  They found the language insulting and overly harmful to them... the bank had all the rights and the buyer was at risk regardless who was at fault.  They said "no way" to that property and walked away from it and continued their search.

 I had a buyer become frustrated because the response to their offer took what they felt was an unreasonable amount of time.  In the meantime, even while they had an open offer on the table, they continued to look.  They did find another property they liked (not an REO) and made an offer.  The offer was accepted and moving toward a successful closing well before the REO even responded to our offer on that property.  I contacted the first agent and let them know my client was withdrawing his offer and moving on.  I did get the bank addendum the next day and promptly rejected it on behalf of my client.

 The sago goes on... I guess all that glitters does not glow!

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Jon Wnoroski

Summit County Realtor
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