Foreclosure in Phoenix>Question Details

Nia,  in Phoenix, AZ

How do I buy an REO home that isn't listed on the market yet?

Asked by Nia, Phoenix, AZ Thu Feb 2, 2012

Quick details:
I own my home and the one across the street, however at the one I live in, neighbors vacated a few months ago (Bought 170k, have 700 in delinquent tx). I find out through investigators coming to my home that they completely gutted out the house. Recently, I saw people cleaning the house, and doing electrical work. A couple of days ago, another private investigator came, and asked again if I knew anything. I asked what was going to happen to the home, and he said lender was getting ready to list. I told him that I owned the house across the street, and would like to buy that one too. He gave me mortgage# and lender name.
I don' have much CASH, so I want to get financed (we are approved). How do I convince lender to sell me the home before listing? Will only real cash do the talking? How much will they take? Any advice on how to buy this before it's listed is appreciated.

Help the community by answering this question:


It might also be a HUD home, if it is owned by Fannie Mae or Freddie Mac. In that case, it would show up, when they are ready to sell it, on . However, investors cannot bid on those homes for the first 15 or 30 days on the market, depending if it is insured or uninsured. If owned by a regular bank, that rule doesn't apply. Many REO sales require the buyer to get a pre-approval through their own channels, so it could give you an extra time advantage if you speak to that lender and re-do your pre-approval with them. Chances are the lender will know who the agent will be. Also, if you don't have your own Realtor, get in touch with one who can help you- you'll stand a much better chance that way. Your own Realtor can set up an auto search for you on that address so once the listing appears, you'll be notified very quickly.

Note that prices are no longer going down. There is stiff competition for REO properties right now, and the banks know that, so they won't necessarily just jump at the first offer that comes their way. You can expect to compete with multiple offers. Just something to think about. Best of luck. Call me at 480-789-9584 if I can be of further help to you.
2 votes Thank Flag Link Thu Feb 2, 2012
Nia. Right now you can do absolutely nothing about this property. Zero. The title, foreclosure procedures or anything else about this property will be tied up for awhile. You’re not dealing with a person. Your dealing with corporate now. All information and title papers are on someone’s desk in a file collecting dust with the other stack of 500 foreclosures. Banks go step by step. You’re chasing a ghost. Nobody knows who the listing agency will, contact number or price. If you call the bank and try to get buying information before it hits the market, be prepared to be on the phone for hours getting a “Sorry we don’t have any info as of now.” I bought a foreclosure in Gilbert but the bank was in Michigan. 2,700 miles away. You and everyone else out there will know nothing until the MLS listing. Or I guess you can grab your I-POD and a lawn chair and sit out front of your house until a sign company rams a fore sale sign out front.

Sorry not the answer you want to hear. Move on there are lots of good deal foreclosures out there. Good luck investor Nia. And good luck getting a loan. Banks don’t lend anymore to us investors. Cash is king.

Investor Mike
Gilbert, AZ
1 vote Thank Flag Link Thu Feb 2, 2012
If the house is significantly gutted (not just appliances/light fixtures missing) and the lender is not replacing the items, you may have significant hurdles in obtaining financing.
1 vote Thank Flag Link Thu Feb 2, 2012
Despite all the bad calls and errors banks have made, they aren't stupid or willing to throw away money. I ran a real estate group that worked with a large bank and I was in charge of handling the homes that ultimately foreclosed. Banks want maximum exposure so they aren't going to simply sell to someone without first getting the home on the market and letting ALL potential buyers know about the property - otherwise, how do they know if they are actually securing the best price?

The ONLY thing you might be able to do to find a home PRIOR to it being listed (not the one across the street, obviously), is work with a real estate agent that participates at auctions. There's additional risk that comes with this approach, but it's possible to get a good deal on a home that way. There's also additional risk that you'd need to know about with this approach, but if it's something you're interested in, I can give you the names of some agents that work in this niche.

Best of luck!

Tim Heetland
(480) 238-3865
Realty ONE Group
0 votes Thank Flag Link Tue Feb 7, 2012
You are unlikely to get the house before it is listed. However, I can set it up so that as soon as the home is put on the MLS you will get an email. This will make it so that you will know the house is listed before anyone else has a chance to act on it. At that point we can submit an offer.
0 votes Thank Flag Link Thu Feb 2, 2012
I went to your website but could not see how to email you.
Flag Thu Jan 22, 2015

If the person that was at the home told you that the lender was getting ready to list it, (and they were cleaning it) then, it most likely already has a listing contract on it with a selling agent. Additionally the banks usually require for that selling agent to have it on the market for a period of time before they will review the offers so that they are more likely to get a higher offer for the home due to the competition. It is not likely you will have success trying to purchase without going through the banks preferred process. They want the most they can get for the property. And in our current market, this process works best for them.

If we can be of help in furthering your investment portfolio, please do not hesitate to contact us.

Best Regards,


Brenda & Ron Cunningham
West USA Realty
*** Recognized by the Phoenix Business Journal as "One of the Top 50 Realtors in the Valley" ***
0 votes Thank Flag Link Thu Feb 2, 2012
Hi Nia,

Jim is correct by stating banks want to get the highest price possible for each property they own. It is very uncommon to contact a bank and be able to purchase a property not listed with a real estate broker.

As an alternative, you could purchase properties at a trustee sale where there are hundreds of properties that go up for auction each day. Now, its competitive at these auctions also but you can find some good deals if you bid often. I offer a trustee sale bidding service where I can go down to the auctions to bid on properties on your behalf. If you would like to learn more about my trustee sale bidding services, then please feel free to contact me or visit my web site.


Sean Heideman, Broker
Position Realty
Office: 480-213-5251
0 votes Thank Flag Link Thu Feb 2, 2012
Hello Nia. Martin is correct. It's very rare that one can purchase an REO direct from the bank prior to listing unless you're making a 'bulk' purchase or buying the 'note'.

There are several reasons as to why that is, but the primary reason lies in the fact that the banks can't sell real estate themselves, this includes Fannie Mae and Freddie Mac. They must hire an asset management company to control the property (there are hundreds throughout the USA), who in turn hires a real estate agent to list and sell the property.

Also, keep in mind...the bank wants to get the HIGHEST possibe price for the property by exposing it to the largest group of buyers possible. The only way to do this is by getting it listed with a real estate agent, who put's it on the MLS which in turn will likely generate multiple offers, which will then increase the sales price.

I have been successful in the past in contacting the listing agent BEFORE it came on the market, but it takes a bit of 'detective' work to first find out who the correct bank or asset manager agent will be and then who the listing agency is. It's much easier if it was a Fannie Mae or Freddie Mac foreclosure (or FHA/VA).
If it was a smaller bank or a non GSE loan, that's a bit tougher; there are several asset management companies that could be hired to sell the property and finding the right one is not easy.

Let me know if you'd like some help in purchasing this home!

Jim Mitchell
Realty ONE Group
Cell: 480.231.6769
0 votes Thank Flag Link Thu Feb 2, 2012
They cannot sell the home without listing it with the agent on the local MLS.

Depending on if its a Fannie or Freddie loan, you may be able to find the agent before it lists and ask to be notified...or have any agent sign you up for an automated email alert for that specific you can make an offer the day it comes on market.

Only smaller local banks will allow offers prior to listing or at auctions.
Web Reference:
0 votes Thank Flag Link Thu Feb 2, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer