to buy a foreclosure home, do we need to work w/ a realtor?

Asked by Annie, San Ramon, CA Thu May 6, 2010

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Keith Manson-…, , Milwaukee, WI
Sat May 8, 2010
You can do what ever you want with the restrictions of the law , bank requirements and already signed contracts. By not hiring a realtor, you are deciding on taking on risk that is substantial for cost that may or may not be incurred.

If the property is listed on the MLS your will have to deal with a realtor because there is already a contract.

If the bank has acquired the property through foreclosure you will have to use a realtor because they do no have the capabilites or want to have direct negotiations with buyers.

If the owner is trying to complete a short sale, the bank will require you use a lender to ensure it is an arms length transactions and no fraud is happening.

So if a propety is in foreclosure, not listed and not a short sale you can possible do it without a realtor. IF you do this make sure you understand your risks!

If you have to use a realtor, I will suggest that you should have a knowlegable buyers agent represent you to assist you in the process.

Keith Manson
First Weber Group
Certified distressed Property Expert
Metro Milwaukee
1 vote
Kamal Randha…, Agent, El Sobrante, CA
Thu May 6, 2010
Hi Annie,

You can purchase a foreclosure on your own but it's very difficult as you'll be competing with hard core investors.

They also have auctions where you can bid for homes on your own.

The best thing to do is hire a real estate agent though because as a buyer, you don't pay any realtor fees. The Realtor does all the work for you, and you can rest assured the home has gone through proper inspections so you dont end up with some unpleasant surprises as you would if you were to just buy a foreclosure with no reports.

Kamal Randhawa
1 vote
Kathy Weber, Agent, Murrieta, CA
Thu May 6, 2010

If you're going to purchase a "listed" bank owned property, you absolutely should utilize the services of a licensed real estate agent. The legal ramifications could be substantial if the transaction is not done correctly.

Secondly, to put an offer on a foreclosed property requires specific contracts approved by the California Association of Realtors. You have to be a licensed real estate agent to have access to these.

To have proper representation, and a chance to purchase one of these properties in your area, you can click the tab, "Find a Pro" on Trulia to find an agent. There's no cost to you, so it's a win-win situation.

Best of Luck!
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1 vote
Lucy Liou, Agent, Danville, CA
Thu May 6, 2010
Hello, Annie

No , you do not need to work with a Realtor but it is better to have a Realtor help your home purchasing.
0 votes
Ruth and Per…, Agent, Los Gatos, CA
Thu May 6, 2010
Hi Annie:

In the State of California, you can buy a home in the following ways:

1.) yourself using forms provided by a Title Company or the Real Estate Department in your town,
2.) by a lawyer or
3.) a Realtor.

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Pacita Dimac…, Agent, Oakland, CA
Thu May 6, 2010
No, you don't need to work with a realtor, but that would be the smart thing to do. All real estate transactions have to be in writing, and there are legal ramifications every step of the way.

Several concerns if you go at it alone
1. If you want to buy at an auction --- you may not be able to get title insurance
2. Where are you going to find the foreclosed home? Nearly all bank-owned properties are listed through a realtor anyway. But that realtor represents the seller's interest (bank). So you should have someone represent YOUR interest
3. If buying a pre-foreclosure, say, one of your neighbors is about to lose the house and wants to do a short sale ---- how knowledgeable are both of you in negotiating a price that the lender will approve?
4. What do you know about the disclosures required to close escrow?

The fact that you're asking this question on a forum like this signifies lack of understanding in what it takes to buy a foreclosed home or any home.

Remember that the realtor working for you as your agent is representing your interests. That realtor doesn't get paid for his services until you close escrow on a property you're buying. And you don't pay that realtor.

But your realtor will have the knowledge and experience to guide you through the process. You get all that at no charge to you.

Some may argue that the buyer essentially pays for that service out of the sales price he pays for the property. If you're attuned to the market, you will know the market value of the property and the sales price is dictated by that information, whether you use a realtor or not.

If you still insist on not working with a realtor, at least get a real estate attorney to help you.

Or you will be a classic example of "penny smart, pound foolish"
0 votes
Doug Buenz &…, Agent, Pleasanton, CA
Thu May 6, 2010
Annie -

No, you are absolutely not required by law to work with a realtor on a foreclosure home. If your goal is NOT to work with a realtor, then you can probably accomplish that. Basically, there are the 3 ways to buy a foreclosure:

Pre-foreclosure. You can try to identify homes where the owner is behind on their payments and try to go directly to the owner and tell them you want to buy their house below market, and don't want to use a realtor. Good luck with that. Most people in that situation are embarassed, and under stress, or even working on a loan modification. If you like people slamming the door on you, it might be a perfect match for you.

Foreclosure Auction. You can buy a property at the court house steps. No realtor. Of course, you need ALL CASH, and it is best if you are experienced in construction and matters of title, as you are buying it "as is", usually with no opportunity to inspect the property, and you are assuming all title risk. Of course, you are competing with professionals who do it day in and day out. But you won't have to interact with any realtor!

Bank Owned Properties. If the bank take the property back, you can try to buy it directly from the bank. And I guess that might work, as banks are understaffed and overwhelmed keeping up with the volume. But I'm sure they are thinking "Hey, I have 238 messages from my asset manager and our disposition brokers regarding actual deals, but I will drop everything and take this call from someone I don't know who wants to buy our asset below its market value".

Banks are not charities. They are not in business to give you a good deal. They are in business to dispose of their asset as close to fair market value as possible. Therefore, they generally work with (here's that word again) Realtors. Once a property goes on the market, it will be listed with a realtor, so no way to avoid working with a realtor at that point.

Again, if your goal is not to work with a Realtor, then you can probably find a way to do it. I guess the operative question is why? There are many highly professional realtors on this site, and they bring real value to the table. And they will save you countless hours of time.

Good luck with your search
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0 votes
Scott Summers, , San Ramon, CA
Thu May 6, 2010
You definitely should work with a Realtor. These properties usually move quickly in this area and you need someone to help you navigate the pitfalls. As an occasional REO listing agent myself, I can say that when an offer comes in, I prefer that the buyer be working with a knowledgeable agent, that way I know that it's more likely to close. As a result, you are more likely to have your offer accepted. You can see all current bank owned houses for sale in San Ramon on my website. If you need help, just give me a call.

Scott Summers
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Marcelina Mc…, Agent, Duvall, WA
Thu May 6, 2010

You never "have" to use a realtor, but why not? There's no cost to you and you gain that realtors wealth of knowledge and have someone specifically working toward your goals.
0 votes
Bernard Gibb…, Agent, Danville, CA
Thu May 6, 2010
Definitely! And why wouldn't you? A realtor is paid by the seller (in this case by the bank) but their primary fiduciary responsibility is to you. That is to say, they are bound by law and ethics to look after your best interests.

Apart from that, there are so many potential pitfalls of not using a realtor that you could find yourself with big problems.

All The Best

Bernard Gibbons

Bernard Gibbons, DRE License # 01331583
J. Rockcliff Realtors, 15 Railroad Avenue, Danville, CA 94526
Phone (925) 997-1585 -
0 votes
John Souerbry, Agent, Fairfield, CA
Thu May 6, 2010
No, you are never required to use a Realtor for any type of transaction. Foreclosures are tricky things, sometimes, and the risks aren't always easy to see. That's why using a professional is always recommended.
0 votes
Joanna Jensen, Other Pro, Livermore, CA
Thu May 6, 2010
Hi Annie,

You really should use your own realtor when ever you buy any realestate.

When you use the listing realtor they are not Your realtor they are the sellers realtor.

When buying a foreclosed home you definately need representaiton.

Using a realtor doesnt cost you anything. If you dont know what your doing you could regret not using a good realtor.

JoAnna Jensen
Realtor Legal Assistant
Legal Realty - Volo Law Group
925 699 5041
Pleasanton, CA
0 votes
Johnny Huang,…, Agent, Walnut Creek, CA
Thu May 6, 2010
Highly recommend you get a buyer's agent to help.
0 votes
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