Hi Kendra,
This is becoming more and more of a problem in bulk REO. I can tell you "bulk" is real and not a myth, but it does take a fair amount of due diligence to weed out what is going on with a particular property. A lot of this confusion stems from the availability of information, or more accurately - mis-information on the internet. There are a few primary reasons you will see a property listed.
1. The property may be being sold from a secondary seller and not the original REO institution. That seller may be trying to "retail" and bulk sell the property - it happens a lot. If it really goes under contract "retail", it will likely get dropped of of the list.
2. It may still be held by the REO institution and they are trying to do both. Same result - usually.
There is very often a huge disconnect between the asset owner, asset manager and asset real estate broker. Very often, there are months that go by, before the asset manager and/or the broker is ever informed that the property has been sold in a bulk deal and the property is shown as available for some time, when in reality it already sold. Further, some of the internet sites don't update their info often enough and it is way out of date and way inaccurate.
3. There are a few online sources - RealtyTrac and Foreclosure.com primarily, that "pull" their information from public records. IE: if a county shows on their public records - a foreclosure sale back to the REO institution, they often show it "for sale" even though it may not even be listed with a broker.
Compounding that; many other sites "pull" information from those 2 and show the same inaccurate info.
Compounding that; much of that info is out of date or inaccurate. Some base it on NOD's issued, some on "certificates of sale" issued, and some on "deeds issued". Only the last is accurate, as the others are not final and can be redeemed or reversed. I can tell you RealtyTrac and Foreclosure.com do not have any real clue as to how many foreclosures there really are or whether the ones shown on there sites are really even in foreclosure or actually for sale. Someone ought to hold them accountable for the mis-information they sell!
Compounding that; there are many sales shown on those sites and others like Zillow and Cyberhomes that show recent sales - these sales numbers are often not accurate either. Very often the sale price listed is the amount in arrears that the person foreclosed on owed the bank - the amount the bank "bought it back" for - not at all reflective of the value.
Compounding that; Many sale prices listed are for multiple properties in one sale. IE, an investor buys 5 properties for $500,000 total and the "recorded" price on each is $500,000 and not $100,000 as it really should be. It happens a lot.
Compounding that; There are many internet sites that will allow "listings" by non brokers and often by non owners - there are people that are not brokers who will "list" a property on internet sites and they don't own or "represent" the owner or property. Many are either attempting to "fit" themselves into the middle of a deal or flip a property before they close on it - it happens in both retail and bulk!
Please, don't believe that every internet "listing" is actually a listing by a broker or the property owner - I can tell you for fact - they aren't!
4. There could be more than one contract on a "retail" sale or bulk sale - many take more than one, as there are often "buyers" that fall through - in essence, the 1st to fund is the buyer (in bulk anyway). Many sellers will hedge by taking more than one contract (sometimes not disclosed).
5. All bulk sales contracts will have provisions for "pull back" - properties sold to others, by other means, or deeds that can not ultimately be conveyed. I have not seen any bulk sale (of any size), where there hasn't been one or more property pulled.
So,....................
Do your own due diligence!
Ask questions - if you don't get good answers - walk away.
Check the MLS for real listings - that is the only place that only allows real, licensed brokers to put listings. Anywhere else could be "listed" by anyone.
Call the listing broker or "listor" and ask questions!
Make sure you have a clause and a vehicle that either withholds funds (escrow) or refunds money (most often occurs in quit claim deals) if a property is not conveyed.
Feel free to "look me up" if you want further info.
Good Luck,
Greg
Nov 06 '09, 10:56 PM
