The REO "Bidding" is always a scam or comes under "Impossible Bidding" since you
have an "Insider" controlling the Bidding.
The Addendums are for ADDING something to a Contract....the Junk the Bank adds
doesn't meet CALIFORNIA DISCLOSURE OR INSPECTION LAWS....just ignore that crap
since they dont' even know what the word addendum means.
And, they use a Counter Form to do the "Highest and Best" sucker Bids....Counter means
a "Change" of something on the original contract....they need to add a FROM....
and a TO...... so that they at least use the FORM CORRECTLY.

The WHOLE STRUCTURE is like the Typical REO...Junk that needs some MAJOR
WORK to correct the problem(s)

Thats wonderful Mac. I'm glad you got some peace of mind from all these answers. Good luck to you and please feel free to call or email me anytime!!

Kamal Randhawa
Broker
510-932-1066

Mac,

You need to get a buyers agent that works with REO Listing Agents, or has a relationship with the REO listing agents. Listing Agents praise agents they like working with to Asset Mangers. The other agents have given you some valuable advice. The listing agent has to deal with multiple offers, and the seller. No matter how many times I see listing agents double end a deal, I think the buyer may have faired better working with a buyers agent. Most REO listing agents take as many buyers as they can, but can only sell the home once. Most of the time they sell the buyer a different property then the one they list. Best of luck. If you need a good Buyers Agent for American Canyon, I can recommend a good agent.

Thanks,

Adrian

This is Mac who posted the question. Thank you all for the very informative answers you gave me... now I am positive which path I shall be taking in this venture I am about to make in buying my first home. I am excited and nervous all at the same time.. just hoping the entire process would have a smooth and favorable outcome.

Hi Mac,

A DRE licensee in CA can simultaneously act as a Buyer and Seller's Agent in a transaction - with the documented consent of both Buyer and Seller. An undisclosed Dual-Agency is a felony in CA. This is a topic that was covered quite well during my Accredited Buyer’s Representative (ABR) Certification.

An Agent has certain Fiduciary duties to a client (A fiduciary duty is the highest standard of care possible). These can be boiled down to Loyalty, Obedience, Diligence, Disclosure, Accountability, and Confidentiality.

Here's the core potential problem of a Dual-Agency:
One Agent cannot provide full Disclosure and maintain full Confidentiality at the same time. To avoid this conflict of duties, a Dual-Agent may not place either client into a beneficial position over the other (i.e. provide advantageous advice to a single party of the transaction). This is a point of possible rare disagreement with what Grace has offered below by stating, "...the agent's first duty is to the REO owner or bank, and, secondly, to you." If an Agent were to demonstrate such a preference this would leave them, and their Broker, open to serious litigation exposure. However, I can fully agree with Grace's statement if She is referring to Dual-Agency situations where the Agent may have less than stellar ethical boundaries.

Other problematic examples:
A Dual-Agent can provide the asking price of a home but can’t provide advice as to its appropriateness. Similarly, say a Dual-Agent performs a Comprehensive Market Analysis. The findings can be shared between the two parties, but not interpreted for either client. In all situations where one of the represented parties may be put in an advantageous position, the Agent would be wise to allow the parties to resolve the issue jointly or through the advice of independent third parties (i.e. specialty inspector).

The decision to allow a dual agency is a personal choice. However, you should be asking yourself what identifiable benefits are you gaining by allowing a Dual-Agency. This same question should additionally be directed towards the Agent. Based on the responses, that the Agent agrees to put in writing, you can make a more informed decision. You may also want the Agent to provide referrals that you can contact to see how prior Dual-Agency transactions went (ask the former clients if they would do it again and what they would have done differently).

In the end, the type of agency does not matter if you are working with a Realtor who possesses uncompromising ethical standards. Note that DRE licensees are NOT bound to a Code of Ethics; only Realtors take that oath, which can be viewed here:
http://docs.Steven-Anthony.com/RealtorCOE.pdf

You can check to make sure an Agent is a Realtor by going here:
http://www.realtor.org/rofindrealtor.nsf/pages/FS_FREALTOR?O…

Additionally, you can check for Agent DRE violations here:
http://www2.dre.ca.gov/PublicASP/pplinfo.asp

My $0.02:
Since the Seller pays the commission to the Buyer's Agent there really is no reason not to obtain the benefits of dedicated professional advice / guidance from your own Realtor when purchasing a home-especially in a REO transaction! This is even more important if significant benefits of a proposed Dual-Agency are not present, and the ethical strength of the proposed Dual-Agent cannot be established. After all, the Seller starts off with dedicated representation, as a first time buyer I would highly suggest you seek the same.

Best, Steve

Hello Mac,

I'm sure all the stories you've heard are pretty accurate. Working with a dedicated buyers agent will be the best thing you can do for yourself. Good luck!

Kamal Randhawa
Broker
510-932-1066

Hi Mac,

I agree with comments below.... I wanted to add that as a buyer considering REO properties you will absolutely need to read the bank addendums carefully. These are contracts that are signed by the buyer prior to full acceptance which spell out additional purchase terms and often over-ride items in the purchase contract the buyer submits. These addendums will designate the sale as "as-is", will often counter out seller paid servicies/costs (such as buyer home warranty, termite repairs/WPA, etc) and, MOST IMPORTANTLY, they very often call for short contingency periods which lapse passively. This means that once the agreed to contingency periods for you to conduct your inspection, get an appraisal and to obtain full underwriting loan approval lapse your contingency dissolves automatically and your deposit will be kept by the selling bank if you default on the purchase. Yes.... YIKES. Something to be aware of.

Having a buyer's agent that is detailed oriented, extremely on top of things AND knows what to expect from bank owned property transactions will help you avoid the possible pitfalls of REOs. In addition, it is my experience that REO listing agents are completely overloaded and incapable of providing key customer service (not to mention their possible biased/comprimised position as mentioned below).

Those are my thoughts! Best of luck!
Tara

Tara Steinke
Residential Sales and Appraisal
San Diego County
619-384-6014
SDRealtor.Tara@gmail.com

Aloha Mac,
As Grace details in her answer, it's in your best interest to have your own buyers' agent representing only you. Your agent will be totally dedicated to your best interests, and can help with the important due diligence necessary on foreclosure properties, as well as negotiating on price and terms. There's more information about working with a buyers' agent along with some informational videos about making an offer on an REO property on my website.
Keep asking those questions!! It's so important when buying a foreclosure.
With warm aloha,
Susanna Kunkel, RA
Kauai Foreclosure and Short Sale Specialist

Hi there, Mac, and thanks for posting your question!

You will doubtless get quite a few comments on this issue, but, as the buyer, you are free to get your own agent or to transact the deal through the current listing agent--a process called "dual agency."

If you choose to use the listing agent, please remember that the agent's first duty is to the REO owner or bank, and, secondly, to you. This may not seem like a problem, but should there be a conflict between you and the seller, the listing agent is likely to gravitate to the client who will provide repeat business and that will be the seller.

If you choose to hire your own agent, that agent's job and duty will be to protect you, and not to protect the seller. As a result, if there are problems in the transaction, your agent will be there to represent your interests only and will work for you to get the best information and solution possible.

Finally, whether using your own agent or utilizing the services of a listing agent, we--as Realtors--are bound by our Code of Ethics not to lie or misrepresent the facts, and if the Realtor wishes to continue working in this field, presenting facts when known and as known to the client is very important. Because this is an REO property, however, there will not be any reports or inspections completed on the property by the seller, and all investigation must be done by the buyer, so the chance of being misled by the seller should not occur.

Good luck and happy house hunting!

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty
San Jose, CA