How do I find a REO expert? Is their a service specifically for investors looking to buy bank owned homes?

Asked by Joe, Santa Rosa, CA Tue Dec 2, 2008

I am looking for somebody who is trustworthy and has experience. I was thinking that there might be Reo specialists concentrating on just Reo's. If so, how to go about finding one. I am looking to purchase a home with all cash in the Santa Rosa, California area. I do not know exactly who to go to. The listing agent? The Buyer agent? Broker? The bank itself? Where to start? Who to trust? Wheres the deals? What to avoid? What to concentrate on? All that good stuff! Any advice would be much appreciated!

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11
Mike Kelly A…, Agent, Santa Rosa, CA
Wed Dec 3, 2008
BEST ANSWER
Joe, all great answers below. And yes, some of the REO agents are simply overwhelmed by the amount of listings they currently are marketing. But as one who has represented CountryWide in many sales this year, I have time to work with buyers and the banks. I have a full-time buyer's assistant who shows our properties. I feel we bring a more deeper understanding of just what assett managers look for in an offer. We advise our buyers on the proper time lements and pricing to make the offer stick. Also, we can advise them which properties will most likely get a "highest and best" counter offer! Not ALL REO's fly out the door! However our properties seem to take 4-5 months to incubate in the REO system and when they hit the market, after we've done the need trash-out, landscaping and interior work, sell within 2 weeks. And not all sell OVER asking price!
Many agents who dont' work WITH assett mangers don't realize that a "highest and best" counter-offer does not neccesarily mean increasing price. Bigger down payments, quicker closes, shortening due diligence periods, impress assett managers as much as a big price increase. The assett managers are very wary and weary of excessively overpriced offers as they know the appraisal process can be very daunting!
So why I'm sure many agents working with buyers are competent and capable, one who works with and understands the assett managers needs and desires is extremely beneificial in this marketplace!
Web Reference:  http://www.MikeKelly.com
1 vote
Dave Roberts, Agent, Healdsburg, CA
Tue Dec 2, 2008
Joe,
The best place to start is with watching the market very carefully. Keep track of which properties are getting multiple bids, which ones sell the fastest, and which neighborhoods are hot. Most of the agents on this site could help you with that. There are some good web sites with REO statistics that might help you analyze the market.
The agent situation is simple. Most listings are by a handful of agents who do a pretty good job of listing property and communicating with the bank. They don't have a lot of time to spend with buyers. On the buyer side, my statistics show that there are hundreds of active agents and none of them have a dominant share of the market the way some do with the listing side. Choose an agent with good references who has had success with at least one REO transaction. Your agent gets paid out of the seller's proceeds, so it doesn't cost you anything to have an agent looking out for your interest.
You're in good shape with an all cash offer. Most of the disappointed, losing bidders for great value REO properties are people who are doing financing. For the banks it's simplest to deal with an all cash offer where there is less chance of the deal falling apart. All cash puts you near the top of the pile...with the other all cash buyers.
What to avoid is trying to save a buck. If you try to lowball every offer, you're not going to get a house. I have generated a lot of data about pricing and overbids and this Sonoma County market has gotten very organized over the past year. Most listing agents price at what they think is a fair number. Most buyers are within fifteen percent (under or over) of those listed prices when they succeed with their transaction. Earlier in the year there were outlier bids of 30% or more difference from the listing price. You might see one or two of those now, but the 300 or so REO transactions in October were in a pretty narrow range from the listed price.
What to concentrate on is easy. Find the neighborhood(s) you like and learn their values. Watch the prices like a surfer watches the waves and wait until the one you want to ride shows up. Then jump on it. Have all your documentation in place and an agent ready to write the offer.
Good luck!
Web Reference:  http://reo.sonoma.net
1 vote
David Merkin, , Silver Spring, MD
Sun Apr 12, 2009
Joe,

Hello
I hope you had a wonderful and meaningful holiday.
we work with dozens of REO portfolio buying groups.
We are an online auction site which provides an exit strategy for REO portfolio buyers’ low-end properties, particularly properties valued under $15,000.
Web Reference:  http://www.bid4assets.com
0 votes
www.esonomac…, , Sonoma County, CA
Sun Feb 15, 2009
Hi Joe,
Go Here http://www.esonomacounty.com

Everything you need.

Craig Bassignani
974-8970
Web Reference:  http://www.esonomacounty.com
0 votes
Robin Miller, Agent, Rohnert Park, CA
Wed Dec 3, 2008
Hi Joe,
I have to retiterate what others have said below. Just because an agent is listing REO properties does not make them a good agent for the buyer. They are so busy dealing with the banks and their listings they do not have time to work with buyers. The market in sonoma county is being driven by the REO market. Pick an area that you are interested in investigating where you know that rents will stay strong. Rohnert Park/ Cotati might be a good choice because of Sonoma State the rents tend to stay strong. Find an agent in the area that you are looking a local agent will be best. They should know the area. Ask the agent where they live. If they live in the area that you are looking in they should know that area really well. They also may specialize in a particular area even though they do not live in the area.

Through my experience of purchasing rental property I find the most important trait that I look for is how well do they communicate. Do they return phone calls promptly? Or are you the one contacting them all the time? Do they keep you informed of new listings, changes in the market, and get back to you promptly when getting information for you? When looking for an agent the three most important characteristics are communication, communication, communication.
Web Reference:  http://www.RealtorRobin.net
0 votes
Dallas Texas, Agent, Dallas, TN
Tue Dec 2, 2008
1st you need to be approved by a lender who have tighten restrictions on loans for investment properties. If you are paying cash keep in mind there are additional costs for closing, inspections, appraisals.

Main focus locate a agent who can find deals whether they are REO's, short sales, comp properties below market value. Majority of properties REO's are distressed conditions due to fact sellers limited resources to maintain a property.

FORECLOSURES: always drama with banks not due to listing/buyers agent, locate an agent who is willing to submit multi offers on your behalf, not all offers you will secure the winning bid.

NEVER PURCHASE: Direct from listing agent you need an agent representing you not the seller.

BANKS dont deal direct with buyers: Banks are not in the business of real estate not interested in training buyers on standard procedures on home purchasing.

http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference:  http://www.lynn911.com
0 votes
Pam Buda, Agent, Santa Rosa, CA
Tue Dec 2, 2008
I think there is value to be gained from agents from around the country for all of us but each market has its own unique characteristics and sometimes generalizations don't apply. I will just say that in Sonoma County, which has had a torrid market for REO's since February of 2008, attempting to research REO's by focusing on the listing agents would not be a good use of your time. And this strictly applies to REO's. I work with many buyers, and they come from referrals, the internet and from my listings.

As Dave said below in his excellent comments, the listing agents with the bulk of the REO inventory in Sonoma County do not have time to focus on buyers. One agent in our office in Santa Rosa personally has about half the REO properties in Sonoma County listed (as well as many in adjoining counties),and he has a team of administrative support people working for him, lots of good people. They have their hands full dealing with the listed properties, the banks and agents bringing them offers. He certainly could represent buyers but that is not his emphasis right now. It is a different business model--he has been working REO's for years but I would venture to say (and I will ask him!) that his focus is not on buyers presently as much as it might have been in the past.
0 votes
Laura Perrym…, Agent, Pensacola, FL
Tue Dec 2, 2008
Joe,

There are several solid answers to your questions with very good advice.

I have been in Real Estate over 25 years and I wanted to add what I would do if I were in your position.

If there were specific properties I had an interest in I would contact the listing agents directly. In addition to the questions below I would ask them to email me with information on other properties of like kind and their opinions on where the best deals are. This would enable me to find out first hand how responsive the agents were to my specific needs and how knowledgeable they are of the market. In the process, if a specific area is mentioned a couple of times by different agents, I would know the area should be considered. I would then make appointments with a few of them, (those that responded with in 24 hours), to see 2 to 3 of the properties. Based on the properties they thought would fit, how timely they met our appointments and how well their personalities fit with mine I would select one to represent me as a buyers’ agent. I would avoid overly aggressive/pushy agents.

The following are some questions you may want to ask during your first contact with any Realtor

1. How long have you been in real estate? Is it your full-time job?

2. Will you represent me exclusively, or will you represent both the buyer and the seller in the transaction? (A good practitioner will explain agency relationships to you and describe the rights of each party.)

3. How will you keep me informed about properties that may be suitable and how often? Once an offer is written, how will you inform me of the progress of my transaction? How frequently? Using what media? (Again, this is not a question with a correct answer, but that one reflects how well they would mesh with your desires. Do you prefer phone, e-mail, or a personal visit?)

4. Could you please give me the names and phone numbers of your three most recent buyer clients as references?

Number 4 will eliminate a lot of agents!

My website provides links to several articles that provide useful information on the home buying process. Look under the Buying tab.

Best wishes for a successful real estate transaction!

Laura N Perryman
Broker/Owner
Real Estate Direct
850-475-8602
Superrealtor@hotmail.com
Web Reference:  http://www.redpensacola.com
0 votes
Lori Rossi, Agent, Warwick, RI
Tue Dec 2, 2008
Hi Joe, Since you seem to have a lot of questions and definetly need guidance on where to begin. I would recommend having a local buyer agent who specializes in REO properties. You would think that all agents spcecialize in these properties now a days, but not so-there is a lot of paper work and patience involved, so you really need someone looking out for your best interest-and as you said "someone you can trust", If you would like, I can refer an agent in that area who specializes in REO's. We have a large referral network, and I can specifically ask for an agent with lots of experience in REO's. You can contact me through my profile. Either way, best of luck!
0 votes
Pam Buda, Agent, Santa Rosa, CA
Tue Dec 2, 2008
All the active agents in Sonoma County right now are working with buyers of REO homes. About half of our buyers the last few months have been investors and unit sales in our market are very strong and driven by the sales of inexpensive (for Sonoma County ) homes under $400K. Many buyers are all cash and that certainly helps as the best homes sell quickly with multiple offers, and often over asking. So all cash buyers can have an advantage when competing with first time buyers with small down payments. You want to hire a buyers agent who is knowledgeable about the market and the neighborhoods and who is a full time active professional who can work with you to jump on opportunities as they come up. The best homes in the best locations (even cosmetic fixers with good bones) are the ones that are moving as the banks have figured out how to move them. In my experience the listing agents are focused on working with their clients, the banks, and you would do better to work with a strong agent who is not the listing agent who can represent you aggressively. Ask your agent to provide references and meet with them to determine if there is a fit. You are best served to focus on your efforts with one agent. The good ones will work very hard for you if you commit to work with them. I would be happy to answer any questions you might have and you can find out more about me and the REO market and sales activity in Sonoma County by visiting my blog below. Good luck! There are some fabulous deals out there and our rental market is strong if you are planning to rent out the home as an investment.
0 votes
Sj209, Both Buyer And Seller, California
Tue Dec 2, 2008
Michael Ames 650-412-1241 or 650-619-3360. His office serves San Mateo, Santa Clara and Alameda Counties. Ask him for a referral to a Sonoma County realtor. Michael is an REO expert and can also answer your other questions. Since you have so many questions I would say you should work with a buyer's agent. Forget the brokers, go to the bank. Start at the bank. Trust no one. Avoid auctions and spur of the moment decisions. Time is on your side, patience my friend! Concentrate on low ball offers and don't fall in love with a property. Good luck.
0 votes
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