With foreclosures also come much more liability than sales such as pre-foreclosure short sales.

Foreclosures may come with clouds on the title such as mechanics liens and other judgments if not careful or other issues depending on the foreclosure laws in your state. Many states allow past owners a redemption period where if they get caught up on any amounts they were behind they can reclaim their home, sometimes up to a year later. The point is there are many more issues and risks taken when buying a home by foreclosure, try buying a HUD home instead where you wont run into any of these issues, getting clear title and deed.

commission for foreclosures and short sales are negotiable with the bank, so it maybe the commission an agent receives maybe a little less than a normal real estate listing. another reason the agent maybe steering you away from it is that these kind of properties are usually more time consuming to deal with because one may have to wait for 2 or 3 months for a counter offer.

Hi Anthony,

Are the foreclosures for sale? Not all properties that are in the foreclosure process are for sale. Home owners may fall behind in their payments and work out arrangements to bring their loan current. Yet, their property may still appear on a foreclosure list.

Is your agent discouraging you from foreclosures because they are not for sale, or are these listed properties for sale that happen to be in foreclosure?

Some foreclosure properties are short sales, meaning the sales price of the property will not cover all the liens to clear title. If your situation does not allow you the flexibility to contend with the unknowns of short sales, your agent may be suggesting that a short sale might not be for you. It is difficult to know if, or when, a bank may approve a short sale. For a buyer, an extended period of time of limbo can prove unworkable.

It can take some time to get an answer from a lender, which is required on a short sale. A buyer must be able to work within the lender’s time frame. For a buyer who is also selling, the coordination of the transactions can be daunting. If these challenges would be too trying for your situation, your agent may discourage you from trying to purchase a short sale in foreclosure.

Be candid with your Realtor about your concerns. Find out if the hesitancy is Realtor lack of familiarity, or it stems from other concerns.

Deborah

Yes, realtors do earn a commission on bank sales and however you don't always know what you will get. More and more listings are stating that the listing broker and the selling broker will split 50/50 the offered commission.

I would caution my buyers on short sales because there are too many entities involved in the sale. Seller, holder of the first trust and the holder of any second trust and all must agree.

Bank sales are cleaner because your dealing with the bank holding the first trust. I have seen a response in 24 hours and worst case 8 weeks and its not over till its over. Banks approved the offer not ratify a contract meaning that until settlement your offer can be thrown out for a better one.

Hope that helps.

Yes an agent does receive a commission on a sale of a foreclosure property. Some realtors that are not familiar with the procedures of making offers on foreclosures steer clear of showing those properties. If foreclosures are what you are after, make sure when you interview your agent ask them if they have experience in making offers on foreclosed properties. It's a little more detailed than dealing with a home seller and a lot more paperwork than what some realtors are used to.

Generally speaking an agent does receive a commission on a foreclosure or short sale. I would caution you however in pursuing one of these choices, as stated previously you are dealing with a bank making the final decision on your offer not the homeowner. Even if your offer gets accepted, it could later be rejected if a higher offer comes in, or the bank can simply change their mind on your offer if the appraisal comes in higher than your offer. The banks are not in the business to lose money and will do everything they can to make money if they can.

Agents generally DO receive commission on foreclosed properties. However, the challenge with many foreclosed properties is that they have been neglected (necessary maintenance has not been done). Even worse, many have been vandalized - sometimes by the last occupant as they were forced to leave. Perhaps your agent is concerned about the livability of the properties you are considering. I recommend a frank discussion of your wishes and concerns with your agent. (S)he is the best one to explain the reasoning behiond the apparent steering.

Agents usually do receive a commission on foreclosure sales. They might be steering you clear of short sales, which can be a a frustrating purchase for buyers because the banks can literally take MONTHS to reply to an offer and can sometimes change their minds if they get a stronger offer. If you look through these posts you will see a few regarding short sales that highlight these situations. But I would just ask your agent! Honesty is always the best policy.