Praying for a Foreclosure Sale

By
Real Estate Agent with RE/MAX Realty Group

Praying for a Foreclosure Sale

This is a bit of a re-blog.  I thought it was appropriate since the number of foreclosures has skyrocketed since I wrote my January post called "About Foreclosures and Sainthood".  It was a very popular post.  I received 55 comments here but more importantly it was picked up by US News and World Report. That led to a number of emails from agents asking permission to reprint my post and an increase in blog traffic at my real blog over at the Eastern CT Real Estate Blog where I posted it.

Although I've handled a few more foreclosure sales since January, I am still not a foreclosure expert and I continue to learn a few things about foreclosures. Some of the things that I do know, I learned the hard way.  Anticipating that foreclosure inventory won't be dropping anytime soon, I thought I'd tweak and share my tips for buyers again.  If you memorize these tips, your foreclosure adventure (and it can be an adventure) might go a little easier.  Agents, while it might sound like I'm being a wee bit flip, I'm really trying to help make your life easier and help your buyer get a good deal. (See #3)

 

Ok, pay attention now.

1.  Complete all the bank requirements before submitting an offer. If the bank requires you to sign and initial 41 pages of documents, don't debate the subject unless you really don't want to buy the house.  That is why they are called requirements. 

2.  Your attorney will hate the required bank addendum and try to change it.  (See #1) 

3.  Don't assume a bank foreclosure is a great deal.  In my experience, great deals are hard to find and most foreclosures are listed at fair market value.  If you are willing to do repairs, you may find a good (maybe even great) deal on a house that needs work. 

4.  Although the price on a bank foreclosure may drop eventually, banks usually don't accept a "low ball" offer.  In some cases there is even a secret formula of how much lower than the list price an asset manager can accept.  Once the price is dropped, the formula is reapplied. 

5. Closing dates can't be mushy. Time is of the Essence.  Bank sellers expect you to close on or before the closing date of the contract.  They don't accept excuses and will often charge a per diem if you are not ready when they are.

6. Keep your offer clean.  Banks won't accept a contract littered with contingencies.  AND if you have a house to sell, don't bother making an offer until your house is sold.  Don't waste your time.

7. Be willing to Close quickly.  I swear asset managers have little contests for most closings in a month.  They always want to close THIS MONTH.  They get really testy if they lose the contest and don't win the toaster.

8. Asset managers are dealing with hundreds of properties.  Don't expect an answer from the bank within 24 hours even if your offer requires that.  Better yet, don't make your offer require that.

9.  Some banks work faster than others.  If the bank, like Countrywide, uses the REOTRANS portal, things may go quicker.  I've been getting responses to offers within 24 hours.

9. Don't get mad at the listing agent if you don't get a response quickly.  (See #8)  You WILL need the patience of a Saint but it really isn't the listing agents fault.  Calling her 5 times a day to ask, "Have you heard anything yet?", won't get you an answer any faster. 

10.  While your offer is being considered, other offers may come in.  This will make you really mad. (See #9)  And to add insult to injury, you will have to sign another paper saying you understand you are in a multiple offer situation so come in with your highest and best offer.

11.  "As is" usually means "as is". 

12.  Prayers can't hurt.

12 1/2.  Agents who list bank foreclosures are automatically eligible for Sainthood.  OK, I just threw that one in for other agents but bank foreclosures are a lot of work. There is tons of paperwork and reporting. Good systems will make the job easier. Unless you are working with banks who have their own list of contractors, be prepared with a list of good, reliable vendors you can count on.  And expect to be yelled at a lot.  (See #9 and #10)

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Susan Neal 01/21/2009 12:57 AM
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Rainmaker
591,387
Valerie Osterhoudt
Johnson Real Estate, Inc. - Cromwell, CT
ABR, Cromwell, CT Real Estate ~ 860.883.8889

Linda.. This is a lot of good information, and I wish buyers would read this first so they know what they will be getting into.  I've come across buyers (no practical ones) that think foreclosures can be had for a dime on a dollar, and as I have mentioned to them and you have stated here, the BANKS are NOT going to give them away, and are listed at Fair Market Value.

Once again, great post.. Have a wonderful Sunday.

valerie osterhoudt

Oct 05, 2008 10:02 AM #23
Rainmaker
216,249
Richard Shuman
The Only B.S. I Have is from the University of Massachusetts - Longwood, FL
Realtor, Broker - Preferred Realty of Florida - ww

I love 12 1/2.

This is going to change with the new bail-out plans????

Oct 05, 2008 10:23 AM #24
Anonymous
Jacqueline SwinDell

Hi Linda,

I'm an agent in Washington State, and i have been working on a short sale property for almost a year now!  I had it sold pending the banks acceptance back in January 07 and the bank sent me a fax 6 months later accepting the buyers offer, but of coarse that buyer already bought something else after waiting 4 months.  The bank is country wide and i can never talk to the same person and never talk to the negotiator.  I have another offer i'm trying to get through now, and it has been almost 2 months now and i still haven't heard anything.  Does this REO Trans website you posted also work with the short sales properties?  I would love to get this property sold! Any suggestions?  Thanks and great job on your post:)

Jacqueline SwinDell  swindell@windermere.com

Oct 05, 2008 11:02 AM #25
Anonymous
Jacqueline SwinDell Windermere Real Estate/NCW

Ooops.  Sorry i have a date wrong.  I've been working on this short sale property since January of 08 not 07.

Oct 05, 2008 11:12 AM #26
Rainer
10,741
Anna Little
Greater Atlantic Shores Properties at Atlantic Shores Cooperative - Virginia Beach, VA

Love this list, it seems like it would be so easy!  But you are right, memorize this list and it will be better!

 

Oct 05, 2008 12:00 PM #27
Rainmaker
1,253,370
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

Hi Linda: I have had great luck working around the per diem charge for escrows that run over the closing date. First, I don't ask for an extension nor try to argue the per diem. I send an addendum, signed by the buyer, that says: "Escrow is hereby extended to XX date at no charge to the buyer."  Except for one REO, all the others have signed it. So, try it, should you ever be faced with that situation. :)

elizabeth weintraub sacramento real estate agent in land parkelizabeth weintraub sacramento real estate agent in land park

Oct 05, 2008 12:25 PM #28
Ambassador
1,477,994
Renée Burrows
Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate - Las Vegas, NV
Las Vegas Real Estate Broker - www.urLVhome.com

I am thinking Carnac needs to be revised for all the complaints about REO agents to help shed the light.  Lots of jealousy and mean-spiritedness directed at y'all!!

I really like #7.  I think (as a BA) I killed the chance at the toaster last month because the email was forwarded on to me.  "There is no excuse for this property NOT funding, recording and closing TODAY." It would be nice if they could hire the sea of former real estate agents, title and escrow agents and mortgage brokers who could understand the complexities of today's underwriting challenges and a real estate transaction :)

I like #10 too.  Makes me sound like a used car salesman (as a BA) but it's all fun and games until you lose that house and my credibility remains intact :)

Oct 05, 2008 12:29 PM #29
Rainer
79,107
Nelya Calev
John L Scott - Bellevue, WA

Great post! Could not have agreed with you any more. Great tips! Thank you

Oct 05, 2008 01:31 PM #30
Ambassador
249,197
Fran Gatti
RE/MAX Coastal Redwoods - Crescent City, CA
Realtor, CDPE, RDCPro - Crescent City CA Real Esta

Linda,

I just completed a sale of an REO I had listed and it went pretty darn smooth, so I can vouch that point # 12 helps a lot.  All your points are excellent and will help agents assisting buyers in these types of purchases have a better chance of success. 

Oct 05, 2008 01:41 PM #31
Rainer
1,075
Randel Melhorn
The Lending Center inc - Houston, TX

Hi Linda

I'm a mortgage with extensive background in construction lending.  Time being hard I decited to develope a specialty of providing financing potential buyer who want to go for the REOs that need repairs or updating.  Getting funding sorces was tough but we've managed toput together a "one time close" that provides closes "as is" and provides monies for repair and remodeling.  We've also identified good contractors ect.  PROBLEM  I though I had the hard parts solved BUT I having problem finding buyers agent up for the challenge in representing potential buyers.  With the $7500 tax break and sells tanked, you would think agents would be falling all over each other to develope an expertise in the enormous market.  One of comments was "will the bail out change things" How could it not.  The bank are refusing to except offers because they don't want to acknowledge losses on the books.  When they sell the houses to the government, that decision is made.  You can bet that HUD will unload them "as is" quickly, just like they did with the RTC in the eighties.  My bet is that the will give first time home buyer a ten day headstart on investors like HUD does now.  Soulds like a market to me.

Any ideas on how I can recruit buyers agents to learn the in and outs and team with us?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Oct 05, 2008 02:25 PM #32
Rainmaker
1,091,448
Bryant Tutas
Bryant Tutas-Tutas Towne Realty, Inc - Poinciana, FL
Broker/REALTOR, Tutas Towne Realty, Inc

Linda, I LOVE selling REOs. There are no emotions involved on the seller side. Just hard cold numbers. I like that. As long as the buyer is good and qualified they are a piece of cake.

Oct 05, 2008 04:22 PM #33
Rainmaker
287,629
Pippa Mac
Chevaux Group Realtor, The Woodlands and Spring - The Woodlands, TX
The Woodlands TX Real Estate

Linda .. oh yes, working with foreclosures gets a realtor EXTRA gold stars!

Oct 05, 2008 05:48 PM #34
Ambassador
1,946,074
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut - Middletown, CT
Your Connecticut Mortgage Expert

Linda, foreclosures can be a pain in the donkey, but from the Lending side of things, I would rather deal with a foreclosure than a Short Sale.  Short Sales go beyond "Sainthood" :)

Oct 05, 2008 07:35 PM #35
Rainmaker
1,104,748
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Foreclosure are not for every buyer.  I think you have pointed out many reasons why.  I find most try to find something on the market where they can work with a "real" seller. 

Oct 05, 2008 08:21 PM #36
Rainmaker
216,149
Tricia Jumonville
Bradfield Properties - Georgetown, TX
Texas REALTOR , Agent With Horse Sense

We just got out of a contract on a foreclosurethat was the deal from hell.  We did everything we were supposed to, but when the closing was a month late and the bank wanted the buyer to sign an amendment to extend for another month because of title issues caused by their error (and, no, they weren't paying any per diem although according to their addendum my client would have had to - we were ready to close some 10 days BEFORE the official closing date and would have, happily), my buyer decided to cut his rather substantial losses and move on.

I will say that the reasons behind the necessity for the recent bailout started becoming crystal clear, going through this experience.

 

 

Oct 05, 2008 08:59 PM #37
Anonymous
Anonymous

It's pretty amazing how banks can sit back on their heels, dictate all, and snap their fingers when they finally get it together. There's something wrong with the way they do business, including getting themselves out of a jamb they put themselves into in the first place!

 

Like the rest of us, I'm finding out the hard way. It feels like taking a ride on a camel. All those humps getting in the way while the crazy animal races across a bone-dry desert.

Judy

Oct 06, 2008 08:36 AM #38
Rainer
207,933
James Wexler
wexzilla.com - Scottsdale, AZ

banks have been good to deal with, Once they own the home, not during the short sale portion of the program :) , as far as offers go, they like quick closes, no contingencies, and large down payments, otherwise, almost not worth making the offers

Oct 07, 2008 10:22 AM #39
Rainer
1,127
Sue Brimmer
Weicher Realtors Suburban Properties - Salem, CT

Linda,

 

I took your class on blogging earlier this week and I got a wealth of knowledge.  Just wanted to say thank you.

 

Sue Brimmer

Oct 18, 2008 10:24 AM #40
Rainmaker
583,342
Susan Neal
RE/MAX Gold, Fair Oaks - Fair Oaks, CA
Fair Oaks CA & Sacramento Area Real Estate Broker

Hi Linda, I remembered that I had read this post some time ago but hadn't had a chance to comment and finally found it again.  It has such great information and I get so many questions that this post answers very clearly.  I hope you dont mind if I reblog it.

Jan 21, 2009 12:50 AM #41
Rainmaker
166,572
Linda Davis
RE/MAX Realty Group - Gales Ferry, CT

Susan - Reblog away!  No problem.

Jan 21, 2009 06:32 AM #42
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Linda Davis

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