Home Buying in San Ramon>Question Details

Homesweethome, Home Buyer in San Ramon, CA

Wny bank wants to hold property as REO?

Asked by Homesweethome, San Ramon, CA Thu Apr 23, 2009

An offer was presented on a short sale home in Windemere ($15K less than asking price of mid $800K). I later was advised that the bank wanted to proceed with REO instead. I can only imagine it would take longer to sell the property.. Can some one give insight why the bank would chose such approach and forgo negotiation on a short sale?

Help the community by answering this question:


Who knows what some banks are thinking. I had a short sale listing in Pleasanton last year in the same situation. We had an offer on for 900k and the bank decided to foreclose. Three months later the property was back on the market again as an REO priced at 899k.

You should wait until the property comes back on again as an REO and write an offer at that point. Let me know if you need some help.

Best regards,

Adam Shoop
2 votes Thank Flag Link Thu Apr 23, 2009
The million dollar question. Banks just don't get it yet. The sad thing is the government is telling them to get REO's off their books. short Sale in an efficient manner wold help the whole system.
1 vote Thank Flag Link Thu Apr 23, 2009
That is a excellent question and I love the responses :)

It is important to realize that banks are a business and they are led by a select few decision makers who establish the protocol for their company to respond.

The real issue is that all facets of the financial market are being impacted and this is all in uncharted waters.

I agree.. the left hand does not know what the right hand is doing :(

By best advice is to get good advice with a industry leader that follows , understands and offers solutions to what is happening in these turbulent times

With the state of todays economy, I'm sure you'll find this VERY helpful for you and people you know.

CIQ Solution Center http://www.creditlineiq.org
Web Reference: http://www.creditlineiq.org
0 votes Thank Flag Link Wed Dec 2, 2009
Hi. Lots of great info has been given. I would add that you should be watching for this property to hit the market again as a REO every day. When it comes back on the MLS, submit your offer that same day. If your offer is good, there is a chance the bank will accept it and cut off any further offers. That's my two cents.

Also, You can track the auction date here if you like. http://www.caferealty.net
And you should have your Realtor set you up to be notified automatically via email when it hits the MLS again.

Good luck.

Scott Summers
REO Listing Agent
0 votes Thank Flag Link Thu Apr 23, 2009
Sometimes, banks are stupid. Sometimes, one bank department does not know what the other bank department is doing. Sometimes there are internal accounting issues which drive their decisions. Sometimes they think they can sell it for more if they foreclose, or in other words they think the value is too low. Sometimes the person handling it is just overwhelmed. Sometimes the seller does not qualify for a short sale (they have other assets, etc). Sometimes they think the market value might go up, and they are better off holding it for a bit. Welcome to the world of banks.

Here is some info on short sales and bank owned properties

Web Reference: http://www.680homes.com/
0 votes Thank Flag Link Thu Apr 23, 2009
It's true there are a lot of things that happen behind the scenes in the bank process so it's virtually impossible to try and guess why they do some of the things we are seeing. Your Realtor can see if he/she can push for more answers, but at this point it sounds like you're out of luck. I have see REOs come up as soon as 2 weeks after being taken off the short sale market so you may be able to catch it. I know several Realtors who have REOs coming up in taht area so I would be happy to put some feelers out. Your Realtor should be able to track what's happening with it though. You can search foreclosures on our site at http://jscarealty.com/mls-search-c10346.html.


Erica Jones Starkey
Broker, Co-Founder
JSCA Real Estate Group
Providing Superior Solutions for Your Individual Real Estate Needs
office: 925.989.1613
fax: 925.905.2417
Web Reference: http://www.jscarealty.com
0 votes Thank Flag Link Thu Apr 23, 2009
Many reasons why. Could be that the offer or sale itself (seller hardship, income, etc) is outside investor guidelines. Even though it may not make sense to those of us in the "real" world, they sometimes are constrained by impossible guidelines. ANother reason is there could be insurance on the loan and the only way they will be made whole on that policy is thru foreclosure.

It could be also that the seller themselves decided to foreclose (there are many reasons they may choose to do this) and to preserve client confidentiality the other agent advised you the bank wanted to foreclose.

But, they are turning the REO's over pretty quickly these days, so if its close to sale date, it may be back on market within a month or so, and then you can move in 30 days of acceptance if you get the deal.
Web Reference: http://www.ccshortsales.com
0 votes Thank Flag Link Thu Apr 23, 2009
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