Why agents not much interested to work with foreclosure house?

[Ekta Patel]

I’m an investor and have 2 agents told me foreclosure house are not good choice to buy. It takes a lot of work and still no guarantees that it’s going to close on time on closing table. They reluctant to show foreclosure properties, and just forget about putting an offer. Wonder why?

[Ronald Allen Barney]

Foreclosures is a specialty area of investing.  It can be lucrative but there is skill involved.  The key to it all is a good professional title search and as much of a head start on due diligence as the institution foreclosing will allow.  One thing that makes it tricky is that people who like to not pay their taxes or mortgage will tend not to pay other things as well, which will spawn liens.  If you buy a foreclosure property and miss a lien on your title search, guess what.  You get to pay the lien.  In the case of some liens, their claim to the title becomes stronger than yours in the foreclosure process so you might lose everything.

But the biggest reason buyer agents steer clients away from foreclosures is that foreclosures don't offer any buyer agent commission. It's less work for that agent because foreclosures come from a short list, but any work they do is free. What I say to clients is to advise them of the tricks and pitfalls in the foreclosure space and tell them if they go that route they won't really need me anyway. Give me a shout when you want to go back to shopping the MLS market or see if I scored any off-market sellers.