for those who don't know much about REO's here is a little bit of advice that can help you. First of all, it costs a LOT OF MONEY for a bank to foreclose, depending on the area it could be $30K - $100k. FIRST, the hire an attorney to file all the paperwork, then they have to play by the rules and call you, send notices, etc... THEN the atty has to file foreclosure paperwork with the court.
Now......depending on where you are this could take quite some time! Florida is the #3 state for foreclosures and it's taking around a year to get some of these cases on the docket.
Most important to know is this: Banks who have REO (in bankspeak this means non performing assets) have a certain percentage of non-performing assets they can have on their books before the FED will not loan them any more money for new loans. THIS is how they make their money, by new loans!
So, lets' think about this for a minute, depending on what the ratio of performing to non-performing loans are, how long they've held the property, paying taxes, upkeep, hazard,, waiting for the court to grant foreclosure, take property back, place with agent, pay agent commission and wait till house sells.....
HOW WOULD YOU MARKET IT?
That depends on the mortgage company's ratio of non-performing loans, how much money they have into the deal with the attorney, agents, time, etc. where the property is, what the market is like, how much inventory there is on the market, etc.
So......to make a long story longer ;-) I would ask the bank the same think I'd ask a seller. what is most important to you, the fastest sale or the highest price?
Some loan companies who don't have a lot of non-performing assets and are not experienced in this are hard to deal with. Some are in CA and have loans in FL and have no clue what the market is like in the area the house is.... it is your job to educate them and let them know that to get what they want, you have to know WHAT that is.
Hope this helps, I've done tons of loss mit, pre-foreclosure, and short sales. I'm thinking seriously of opening my own company and doing consulting on this issue because a lot of agents don't understand how the process works, none of the consumers do, many investors don't, but there is a way to do these sales easily if you only know who you are dealing with and what the bottom result is that the loan company wants and needs and how experienced they are at this.
â€œSubmit on CAR form with 1% deposit and a pre approval letter. Owner reserves the right to choose Title Company AS ISâ€
â€œsubmit offers on CAR form with 1% earnest deposit, title company sellers choice, pre-approval letter must be submitted with offer and AS IS no inspections or reports.â€
â€œWrite all offers on CAR Residential Purchase Contract. Please contact Listing agent regarding Seller Addendum prior to writing offer. Allow 2 business days for seller response. Buyers to be pre-qualified by Countrywide lender so and soProperty to be sold as-is. Seller reserves choice of services. Fax offers to or email to "
â€œSubmit all offers on CAR form with copy of deposit check and pre-approval letter from lender. Seller reserves choice of title and escrow, Disclosures will be provided upon acceptance do not send with offer. There are no reports on file. Offer As Is. No offers contingent upon selling or closing a propertyâ€
â€œSubmit all offers on CAR form w/proof of funds for cash offers or pre approval letter from direct endorsement lender and copy of deposit check (3% of PP).â€
Now if youâ€™ve worked in the business for a while youâ€™d swear that was the language we got when we had to submit multiple offers and the agent could care less if they co-operated with us because they are were â€œdouble-endingâ€ the deal! I think someone needs to publish a full page ad entitled, â€œAn Open Letter to All Lender and Realtors Selling REOâ€™s!â€ . Put it in the Wall Street Journal, New York or LA times, stating they need to be more responsive, realistic with their pricing and a touch more cooperative!
I dread working with REOâ€™s and I know most of the folks in my area doing them. Iâ€™m also aware of how a REO gets to the market and the huge â€œlossâ€ the lender is facing by now having to market this taken back property. But Lenders should really get hip to whatâ€™s happening in the marketplace. One Realtor I know who sells REOâ€™s did it years ago and is now easing back into the fray. He is offering 3.5% to the Selling agent and also a $2,500.00 bonus. Now Thatâ€™s understanding the market and wanting to make a deal. The others donâ€™t wish to kill the goose laying the Golden Eggs. Canâ€™t say I blame them as they have the market cornered. However, their arrogance, both the lender and Realtor/Licensee is enough to make you swear off working with Lenders ever!