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Buying off market REO
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@Richard Bradshawfrom what I gather on my research and reading BP posts, this is not something they will do with an individual. REOs, correct me if I'm wrong @Wayne Brooks, are given to the listing agent of choice for the lending institution. When you say bankrupt I assume you mean the owners of the property and that BOA was the lender that re-secured or purchased the property after the foreclosure was completed.
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@Daria B.No they literally went bankrupt and I'm guessing the property was taken over in he bankruptcy proceedings. Their name was listed in their local paper or something as being granted the bankruptcy. I saw that on a Friday and on Monday the house belonged to the bank.
But thank you, I will wait for the property to come up on the MLS.
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Yep, waste of time trying to talk to the bank. Odd that the bank actually got title during the BK. I have one now, owners did BK 2008, house still in their name.
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As stated above, you probably can't do anything until it hits the MLS. And bankruptcy cases take even longer than typical short sales and REOs - it essentially becomes a foreclosure/short sale wrapped up inside the bankruptcy court proceedings, so it's like a perfect storm of potential delays.
Eve after it hits the MLS and goes under contract, it can still take forever. I have one under contract from the MLS that I've had under contract since August 2015. It still hasn't closed after six months and counting (was supposed to close yesterday, but delayed yet again)!
So, at best, bankruptcy foreclosure properties are a potential long-term strategy, if you can afford to tie up your earnest money for several months and deal with the seemingly endless delays. Luckily, the market is red hot here right now, so this particular property is appreciating while I wait! But that will not always be the case.
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@Jeff Copelandis that property you have under contract occupied? Just wondered since it's tied up in BK whose taking care of it if it's not occupied.
@Richard Bradshawgood luck with your searching. There are a lot of foreclosures going on in my area, just found another last night that actually went to auction and it was interesting to see the court docket papers that had the bidders. It went to the US TRUST bank of course so I think now their next step is to put it in the MLS and let people fight over it. The other bidders on the auction document that I found started at $100 and the highest next to the bank was an individual that bid $88k. The bank won at $96k.
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@Daria B. - No, it's vacant. Not really a concern for me, most REOs sit vacant for several months (often much longer). I stop by and check on it occasionally, but it's not going anywhere.
The bank/trustee normally has a field services company who secures the property, cuts the grass, etc.
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@Jeff CopelandI see. You are just waiting to get it secured then after they figure this out. That is a long time but at least you have the property, so to speak.
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@Jeff Copeland Thanks for that information. I wasn't too sure how the bankruptcy foreclosures went. I have dealt with regular REO thought.
@Daria B.Thank you, I just closed on a property that was REO, I am curious but about auction properties but worry about not walking the property before hand.
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@Richard Bradshawcongrats on your closing!
How did you handle the REO, I've yet to get past the offer on one. Was there a lot of back and forth? Did you use an agent?
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@Daria B.Thank you,
Yes, you will need an agent. We did negotiate back and forth a couple times. They are a little more difficult to deal with than a with a regular seller, but those are the hoops you'll have to jump through for the discounted price
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@Richard Bradshawwhat I found with the two that I was interested in was that the price wasn't that much different than a non REO. On one I did one offer and the agent turned it down. Than finally I saw it go for less than what I was offering. It's been irritating nonetheless.
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@Daria B.it definitely depends on the condition of the property on whether you will get it at a discount and also what your market is like. I can't tell you why someone would reject a higher offer. All I can think is that the bank had already accepted the lower offer.
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@Richard BradshawIn the latter case, I looked at the property with my agent and gave an offer and on the first conversation she had with the agent, he said no. Aren't they supposed to send it to the seller (in this case the bank) and not just say no. Anyway, I walked away and found out a few months later it sold for less than my offer.
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Originally posted by @Wayne Brooks:
Yep, waste of time trying to talk to the bank. Odd that the bank actually got title during the BK. I have one now, owners did BK 2008, house still in their name.
Agreed banks are just greedy lol but the truth
Alex