Foreclosures are Hard to Buy

Foreclosures are Hard to Buy

But how do we notify the banks?

I read an article where a realtor worked to find out about a boarded up house in a very nice neighborhood. It had been neglected for months and many people were “interested” in purchasing.

What she found out in her investigation was alarming; the husband/wife realty team who had been given this REO months earlier had a total of 500 REO’s to handle and couldn’t handle the volume!

My question is, do banks check or follow through with any of this? Do they have a department of “foreclosure follow-up”? I doubt it.

What a shame. I’m also constantly amazed by some of the realtors who get REO’s. We have tried working with many who have made the process from our end, cash buyers, a nightmare.

What I know for sure is this;

banks could sell more REO’s if someone on their end was accountable and paying attention.

Shouldn’t brokers let the banks know if they have more than they can handle?  Isn’t their responsibility to service the needs of the client, in this case, the bank?  Do banks even check how many listings their “preferred” agent is handling?

And many REO listings are given to agents who aren’t even in the same county as the property and don’t, therefore, know the neighborhoods and the comps.

Isn’t anyone at the bank paying attention? Isn’t anyone responsible for this fairly significant event? How do we find out? Whom do we contact about this?

There are many of us able and willing buyers out here with cash in our pockets who are frustrated at the process.

Is anyone listening??

Apparently most banks outsource REO’s to Asset Management Companies who in turn hire local agents to do the work. These companies collect a referral fee from the listing agent.

Because the work is outsourced, the bank has no idea how many properties individual agents have at any time.  AMCs may know how many assets they’ve assigned to individual agents but brokers can, and do, sign up with multiple AMCs.

Of course, the real point here is lack of service. Sometimes a realtor may have only 2 listings and not be handling them while someone with hundreds may have a knock out staff and be keeping up.

I’m just sayin’ that someone at the bank needs to know, pay attention and be accountable. And it would be nice if we buyers had somewhere to voice our complaints. Houses may be the asset but it’s still a service industry. With so many properties on the market, someone at the bank needs to care about the process.

This points out once again that banks were not, historically, in the housing business, they were in the lending business. However, now that they are deeper and deeper into the housing business, they need to pay attention to the details.

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  1. Thank you, Skip, for the helpful information.

    I know that the realtor is responsible for keeping the yard mowed and the water and lights on. Most times, the properties have no power and look terrible. I realize realtors are tying to reduce their out-of-pocket expenses, but the neglect devalues the house as well as the neighborhoods.

    Our packages usually come with a check for the full amount. You’d think realtors would definitely “look for” our offer!

    Hope you’re having big success in this market.

  2. REO listing agent/brokers do handle large volumes of property across wide multiple county areas. Because they work on a reduced commision with the bank/lender (usually only half of the industry regular rate) they try to make up for that lost revenue in volume.

    Also to make up that loss, they spend little time servicing the account. That translates into poor property service (yards, etc.), poor follow up on inquiries, and half hearted interest toward making an offer work.

    Our challenge as investors looking for a sharp deal is to make the listing agent’s end of the offer process as easy on him/her as possible.

    One way to do that is to make your offers in a consistant way. Whatever your “package” is (ie. cover letter, contract, pictures, comps, etc.) present it the same way each time. Your graphics, layouts, etc. should be the same for each package.

    The listing agent will soon begin to recognize your package. After he has handled a successful offer or two, he will begin to “look for” your offer among similiar properties.

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