Question Details

Billy, Home Buyer in hong kong

Buying a bank owned home directly w/o Agent?

Asked by Billy, hong kong Tue Jul 15, 2008

I am interested in buying a home directly from a bank, without enlisting the help of an agent. First of all, I realize that many of the professionals on this board are RE brokers or agents, and do not want to hear this. The simple fact of the matter is that I cannot grasp having 6% of the price of the house going to agents, when I can have a lawyer negotiate with the bank, make sure there are no hidden problems, and close the property for me much more efficiently. This is not a commission beat down question, but one of how to approach a bank in this scenario. We have plenty of time to find a place and move (up to 10 months). My best guess would be to write a letter to all of the local banks telling them what I am looking for, and to call me before they push it to a local REALTOR. Any suggestions? Please no responses telling me about why I need a REALTOR - just stick with the question. I appreciate any useful input!

Help the community by answering this question:


Here is what fannie mae says:

Can I buy a house directly from Fannie Mae without going through a real estate sales professional?

No. Fannie Mae depends on the expertise of local real estate sales professionals and accepts offers only through our real estate listing agents. You may work with any real estate sales professional to submit an offer to the real estate agent who has listed the property.

Here is what BOA says: Bank of America does not engage in the brokerage of real estate properties.

here is what hud says: How are HUD Homes sold?
All properties available for purchase by the public are offered for sale at Internet listing sites maintained by management companies under contract to HUD. Any real estate broker registered with HUD may submit an offer and contract to purchase on your behalf. HUD pays the real estate broker's commission, if included in the contract.

HUD sells properties that you might want to buy! Read how you can buy a HUD home.

Then, check out the listings of HUD homes in your area. If you think you want to buy a HUD home, you need to contact a real estate sales professional in your area who is authorized to sell HUD homes (most are). Your sales professional will submit a bid for you.

Here is what chase says:

This site contains all Chase-Owned Properties that are currently Available for Sale. Please note that we use local REAL ESTATE AGENTS to coordinate all matters related to the potential sale of these properties. Chase does not negotiate or accept any offers directly. All Inquiries must be made to the REAL ESTATE AGENT assigned to the property

Wachovia: This website will allow you to search for Wachovia-owned properties in your area. Wachovia does not sell these properties directly. When you locate a property that you are interested in, please contact the real estate professional identified in the listing for more information.


There are laws on the books to keep Banks out of the Real estate business. Till I researched your question I didn't realize that it seems as though they can not sell their own properties.

On a second note I can't imagine a bank thinking the would be qualified to sell their own properties. Real estate is local in nature and lending is statewide to nationwide in general with the exception of the smaller banks.

I can understand not knowing the value of an agent but it seems you may need to work with one.

"Regardless of what anybody has been told, there are substitutes to having a RE agent." The bank actually saves some money by using an re agent, the BPO's are cheaper than getting seperate appraisals.
They are less likly to have an error on the contract, if there is an error it might be covered by the Brokers E&O insuance.

Commissions are not set at 6% with banks.

Carlin, people like you are the reason I have to defend my industry. Grow up or go to the disney forums.
2 votes Thank Flag Link Tue Jul 21, 2009
Carlin and Jesse: "What you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul."
1 vote Thank Flag Link Tue Jul 15, 2008
OK Billy. I understand your question. The bottom line is this: the bank does not want to deal directly with the consumer. Can you imagine the number of inquiries they would have if all consumers decided to contact the bank directly? They would truly be bombarded with calls and have to hire additional staff to to handle the calls. The banks are not in the real estate business, nor do they want to be. Also, they cannot legally "rebate" a commission to a non-licensed individual; therefore, you would not realize any savings.
1 vote Thank Flag Link Tue Jul 15, 2008
Unfortunately, RE agents must still be in the loop and "earn" (term used quite loosely) their commission with these bank owned properties. So Billy is stuck in this particular case. I have been privately investing in RE for many years and found the only way to buy directly from the bank lately is to go in with an all cash offer (no financing, contingencies, etc) for a block of homes (10 to 12) and simply buy in bulk volume. Today, banks have only dealt with me when I'm willing to buy in blocks of $2M to $2.5M. Using this method allows you to buy for $.50 on the dollar, eliminates agents altogether (assuming you are capable of representing yourself), and provides you the most control over the entire transaction set.

Given Billy is looking for a single home, your best bet is to represent yourself and let the listing agent "double end" the deal so that he/she can reduce their commission down to 3 to 4% for the whole transaction which gives them added incentive to take your low ball offer.
0 votes Thank Flag Link Tue Jul 21, 2009
Hi Mark. I saw a bumper sticker the other day that read "subvert the positive paradigm". As buyers, we have to reconfigure the value chain by changing how banks 'distribute' their inventory in a way that benefits both the bank and the buyer. 6% is a huge amount of the negotiating pie. Regardless of what anybody has been told, there are substitutes to having a RE agent. RE companies have done a good job preserving industry structure by telling people the only way to buy a house is through them. Unfortunately, people believe what they are told, whether it is true or not.

I am proposing to contact the bank directly and telling them that if they want to cut out the middle man, we can each keep a little more of the pie. I was wondering what other people had done in the past. This is just one avenue I am thinking of, seeing how I have 7 months to a year to find a house in the location I am moving to.
0 votes Thank Flag Link Tue Jul 15, 2008
You gonna use a lawyer to negotiate the sale of a bank owned property?? LOL LOL LOL

silly boy, That REO bank owned property WILL PAY a listing commission, some 6% whether or not you use an agent or not.

Banks generally do not sell the properties at the ATM, they use bank paid realtors, and they pay them a commission.

Thats right, so when you buy your bank owned property, chances are, you also paid that 6% commission

Thank you for supporting the very profitable world of real estate
0 votes Thank Flag Link Tue Jul 15, 2008
Good Luck with that Billy haaaaaaaahaaaaaa lol
0 votes Thank Flag Link Tue Jul 15, 2008
Thank you Pat for answering. Let me try to clarify my position. Banks are always trying to preserve margin, and by not using an agent, they automatically save 6% on a very large amount of money. 6% of $200,000 is $12000!!! You are right, banks are not in the real estate industry, and that is why they try to get foreclosures off their books. You are also right in that banks are not allowed to 'rebate' a commission to a non-licensed individual. However, if there is no agent in the first place, there is no commission and thus no 'rebate'. I have already written the Mississippi AGO office about the clause not allowing a 'rebate' in the real estate contract, as I believe that is anti-competitive (as does the USDOJ).

I am considering using a lawyer to negotiate the price and go through with the deal, as I think this would be cheaper. It is a free country after all, and I do have that option. The other option I am considering is buying the books and spending a month getting my RE license, and then brokerage license.
0 votes Thank Flag Link Tue Jul 15, 2008
ROFLMAO....well, if you can't stomach the idea of paying a Realtor their commission then I suggest you ask your Attorney this question and see what he tells you to do.
0 votes Thank Flag Link Tue Jul 15, 2008
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