How to buy bank owned house that's not for sale

[Kim Forgione]

I stumbled across a house I'd like to buy and live in but it is not listed for sale; it hasn't been on the market for years. On the county assessors records, it says Bank of America, Plano TX owns it 100%. It appears it may have been foreclosed years ago and the bank still owns it and is not doing anything with it. Any advice on how to inquire on such a property? TIA

[Christopher Phillips]

Kim Forgione

Banks have their own internal process for cleaning the title and then getting a property ready for sale.

Any number of reasons can tie up a property in legal issues like other claims to the property or a previous owner declaring bankruptcy.

And the bank will also hold off moving inventory until they feel like it’s the right time to put it on the market. Banks don’t want to flood the market with inventory and lose potential market value.

How can you buy it before it reaches the market? You can’t. It’s against the bank’s internal policy. Selling a property off market will get a bank less money than selling it to the open market with an agent, so the bank’s policy is to always list it with an agent on the MLS when they are ready to sell.

If you network with asset managers in small banks you might be able to get a list of properties and work a deal. You can’t really do that with large banks.

Large banks offload their REOs through regional asset managers so there is no way to network with anyone at the bank itself.

How do you network with small lender/bank REO managers? You don’t unless you used to work there or you happen to be a big enough player in buying REO properties that they know your name.