Lenn has definitely outlined a trend that I can attest to having done bank transactions. The banks seem to have no respect for deadlines, thay want to call the shots and have the audacity to suggest that they will penalize buyers if they change or cannot make the closing deadlines. The REO Listing agents do a poor job of communicating with Selling Agents. In my experience Banks seem tothink that their convoluted systems are always the best way to go. Please stop by Lenn's post and leave her a comment
DO REO BANK OWNERS READ LISTING REPORTS?
DO REO LISTING AGENTS WANT CO-OP SALES?
WHY DO THEY MAKE IT SO HARD?
I'm previewing a selection of bank owned potential FHA 203(k) properties today. A smart buyer couple is interested in buying a property that would offer INSTANT EQUITY with FHA 203(k) financing. The first place I go for 203(k) buyers is to the available REO properties. First of all, to the owner/seller, these properties are not homes. The properties are "inventory" and discounted, often significantly from market. Also, I have a relationship with a loan officer who plays the FHA 203(k) loan like Itzhak Perlman plays the violin.
Step 1. Previewing the properties is usually easy.
Step 2. Showing the properties is usually easy too.
Step 3. Making an offer. . . NOT SO EASY.
JUMP THROUGH HOOPS. That's what some sellers and their listing agents require of a buyer to just make an offer.
INSTRUCTIONS FOUND IN LISTING REPORTS THIS A.M.
SUBMIT OFFERS TO: WWW . XXX . com.
Buyers must be submitted to a web site URL.
Buyers must be pre-approved by XYZ Mortgage Company listed in the MLS listing report.
Offers must be accompanied by earnest money in a Cashiers Check made out to the listing broker.
Buyers are responsible for utilities for home inspection.
Buyers must be pre-approved with loan commitment letter.
Offers by e-mail only.
Offer instructions: See web site (no web site address).
Contact listing agent by e-mail only. Incompatible e-mail link.
Buyer pays for condo docs.
Commission may change.
Watch out for mold.
Send offers - response in 2-3 days or more.
Joint venture (bank and N.A.C.A). Well that's a red flag.
THESE PROPERTIES ARE USUALLY A GOOD BUY. Not that buyers always understand the dynamics of price/value, they usually do not. No matter what the list price, most buyers are still inclined to want to negotiate, negotiate, negotiate. Fine with me. The problem is that with so little communication or it may be impossible to communicate with the listing agent, often the only thing we can do is write. Now, on a normal listing, I rarely have to speak with an agent prior to writing. I am inclined to write and deliver the original offer to the listing agent's office. That's rarely possible and certainly not encouraged today with REO listings.
I KNOW LISTING BROKERS WHO ARE CARRYING HUGE NUMBERS OF LISTINGS. They are smart to automate their listing procedures. However, are they smart to take themselves out of the line of communication when a buyer wants to buy a foreclosed property??
WHO BENEFITS WHEN THE PARTIES DON'T COMMUNICATE? I wonder if the Days on the Market might be reduced and the ultimate sales price and net proceeds to the seller (bank) might be more favorable if the process to sell REOs more closely resembled a regular sale.
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.
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