Everyone wants a deal! And, the REO properties coming on the market seem to be at bargain basement prices. Sounds great, right? To date, our dealings with REO purchases can be summed up perfectly in one word – nebulous.
Don’t get us wrong, people are out there buying REO’s and when the market comes back (no one knows when that will be) those purchasing now stand to gain a good deal on their investments. However, the process is not for the faint of heart, or for those who cannot live in the “unknown” for a while. The banks seem to complicate even the most straightforward of situations and the main difficulty with the REO purchase process is a lack of communication and information. For instance, we put an offer in on an REO duplex for some clients a couple of months back. Our clients LOVED the place and they made a full price offer in order to get it. We never got any response. We called and e-mailed the listing agents many, many times to find out the story, but nothing ever happened. During this period, it was difficult to get our clients to consider other possibilities, because their hearts were set on that place. Long story short is that the duplex was under the jurisdiction of a city agency that handles rental properties in need of repairs. No title insurer will provide a policy to a property that is under this jurisdiction. Therefore, no lender will lend on it. The only type of offer that could be accepted on such a property is an all cash offer, which our clients were incapable of doing. We lost about two months of time dealing with that property which would have been avoided with a simple disclosure. It’s possible that the listing agents didn’t know either. Or it’s possible that they did know and it slipped through the cracks. The listing agents on many of these properties have hundreds of listings in areas that are outside of their normal territories and quite simply it’s next to impossible to keep up on them.
Our advice if you’re looking for REO properties – 1) Get comfortable with not knowing and develop the ability to go with the flow. 2) Don’t get too attached to any one property. 3) Keep looking; until contingencies are removed there is no deal.
If you want to throw your hat into the ring and find an REO The Savvy Duo can help you with your search and we’ll even help you with the mental angst — no extra fee.
