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Do Banks Sell Their Own Foreclosed Properties? In California? Across the Nation?Forclosuers, Another name for Bank Owned PropertiesAlmost every week I have a client or a realtor ask me about my bank's foreclosed properties. Where can I get the Bank's Foreclosure Property list? Or, how can I become one of the Banks preferred realtors to sell their Foreclosed Properties. Also clients often ask me to get them pre-approved at $100,000+ below listing price so they submit a contract on foreclosed property, as an example. Here is a description about one channel that many banks use to re-sell foreclosed properties. First, the re-sale of Bank Owned properties may work differently in different markets and with different banks, but most banks to do not have an REO department or even the staff to handle their current foreclosed properties. Because they do not have the mechanism or experience to handle foreclosed properties internally, they typical contract out the management and sale of their foreclosed properties to a third party. I will call this third party the "Bank's representative". The Bank's representative is typically handling thousands of foreclosed properties, properties which may span across the nation for national banks or maybe just regionally for a regional bank. But in either case, the Bank's representatives are often no-where near the foreclosed properties. Because of this, there often is a disconnect between the Bank, the Bank's representative and the listing realtor. To sell the foreclosed properties, the Bank's representative effectively have to do a job-search to find realtors in a region close to a group of foreclosed properties that have certain qualifications:
Trust:This is a little harder to explain. The Bank's representatives is a pretty large team, often having a staff that would fill a warehouse with cubicles. Each underpaid overworked staff works in a small cubical with stacks of files piled all the way to the ceiling, the phones constantly ringing interrupting them from working on files with multiple realtor team(s) trying to get a hold of them, but often can't. Each staff member may just have enough time to document the submitted purchase offer information into their computer application each day. They do not have the authority to give the Go - No Go decision if the purchase contract is acceptable. A Computer Application makes this decision! If you were ever frustrated at why you submitted a "good" offer and it was rejected on a foreclosed property, this may be why. Trust comes into play in the partnership between the realtor team and the Bank's representatives. When both trust each other, they communicate well and believe in each others professionalism and ethical arguements. The Bank's representative will not just hold onto pre-existing statistics or the computer denial, they will listen to the realtor team and the current market statistics they use to argue thier case. If the evidence is convincing that the sale price is either to low or high, the Bank's representative will override the computer's decision. As trust deepens, this interaction becomes easier and easier. Here is an example. A listing realtor receives a purchase contract with FHA financing. Lets say the purchaser stated he needed both 3% or more seller incentives to be applied toward the Nehemiah Program (to cover the FHA borrower investment requirement) and maybe 3% to cover closing costs. If an acceptable purchase prices was arrived at to meet these requirements, the computer application most likely would deny the request because it would be outside of acceptable guidelines. If a trusted relationship between the listing realtor and the Bank representative existed, the listing realtor would be able to convince the Bank's representative to override the computer application's denial because the purchase price was acceptable taking into account the seller contribution. This is also why when a buyer submits an unrealistic offer; there is very little chance the offer will be accepted. I hope this helps.
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Author
Alan 'AJ' Nisen California Contra Costa Mortgage Officer A Large Bank in America Lafayette, CA Office Phone: (925) 688-3820 Cell Phone: (925) 963-5836 More information... Contact Alan 'AJ' Nisen California Contra Costa Mortgage Officer |
