BiggerPockets

what is the best way to get intouch with someone or a company that sells REO's. i live in south Louisiana . just interested incase i would like to go that way .

Hi all, just wanted to put my 2 cents in. I have been looking into REOs for a while and I think they are a great opportunity. Well, long story short, obtaining one for for it's true default value (or close to it) is harder than one would think. Maybe I was just barking up the wrong trees. I tried contacting the lending institutions themselves and asking for the loss mitigation/foreclosure department. Well, after getting the run around, the only answer I got was "we don't have any REOs" Perhaps I should have been more persistant, but I also found out that almost every direct lender works closely with a few realtors. So of course, they get all props first, as they come up.
After that, I did more researching and found and "REO realtor". Now I'm not saying anything negative about realtors by any means. They are great and a necessity. However, from what I have seen is that the person getting the steal isn't you, it is the Agent. They get huge cuts out of it, and the buyer usually only gets a slight discount. Of course, if I were the realtor, I'm sure I would do the exact same thing. Who can blame them?

Anyway, to tie up this long novel I've just written, this was just my experience. Hopefully others have had a happier ending, and if so, please speak up! I would really love to have my faith in REOs restored!

Where are these huge cuts and how am I missing them? :help:

You got it backwards caligirl as a REO agent you take the listing at below normal commission and pay a referal fee to the bank. You have to check on the property for the bank and cordinate property management. The biggest reason to do REO work is to try to work with the buyers yourself and get paid on both sides of transaction (seller and buyers side) or to get the exposure of your side in a yard. If you are planning on making big bucks as an agent listing REO properties and doing nothing else you better plan on carring an inventory of 50-60.

As far as the lenders not caring about what a property sell for try to get an asset manager to drop the price 5000.

There are costs that the lender has that are above the remedy price on the forclosure. Legal fees, court costs, eviction, clean out costs, interest, insurance, maintinace. The lender wants to get the property sold at the highest price in the fastest time. A lot of the time they will price a property higher that what the BPO's have come in at but they are trying to manage a portfolio of properties and lose as little money as possible. The bank never wins on REO property it is a money losing item for them forclosure is a last resort.

REO's are almost always listed by local RE agents where the property is located. If you go to the many bank sites and click on their "bank owned property" list - it will show houses and with whom the house is listed through MLS.

I agree that the houses are not listed well. Many are at FMV and need lots of major work. A bank doesn't look at cosmetic or updating as a bad thing. They like to look at major plumbing leaks, bad roofs and the like for price reductions.

Plus, the bank lets the RE agent listing the house set the price. Personally, I have never seen a REO house on MLS at a good price. I'm wondering if the RE agents are promising high prices to get the listings from the banks.

I'm also seeing Banks fixing up and repairing properties in our area to try and get higher prices. They are fixing major problems but still leave the house in less than desireable condition.

I've seen houses here on the market for almost a year - and have talked to those making offers - and the banks rejecting each one. I'm not sure they want to sell these houses. I'm at a loss to understand it.

P.S. ... I'm not sure where I read this, but I read that lowering a price on a house depends on spans of time and how many offers they get within those time spans. I'm not sure how that works. Anyone?

Just my 2 cents on this one as I've seen it.

I am not sure of any banks that sell their REOs directly to the public either. I agree with you on the ones that will not budge on pricing. I have one company that I work with now that is that way and it is ridiculous and I am thinking of dropping them as they do not reimburse me for expenses on time (or at all) and they will not accept offers that are the best they are going to get. It is a waste of my time and energy. They will relist these with a newer agent hungry to get into the REO market and let them sit. I do think these companies are going to end up in serious trouble. I blame the asset managment company on this one though, not the actual bank. I think the bank needs to find a new asset mgmt company.

Do you list REOs in your area?

Does anyone know how to find REO's on the MLS?

Hey everyone in this post,

A few psots ago my business partner informed you we have a relationship with a relatively large lenders REO assets. We are always looking fro investors who can perform because they have more assets than investors can handle. You may want to email me for more specifics and see of we can put something together to help you achieve your goals. I don't always get a chance to respind in the posts so email is the best. In the last 4 months I have personnaly been involved with $230M in REO assets being moved to 4 investor groups at around 65% LTV.

Contact me if you really want REO proeprties.

Thanks,

You are absolutely correct in theory. I have often wondered why the banks don't just al;ways overbid the amount at the auction to ensure they have to opportunity to maximize their profit potential because it is just paper money to them.

But, the fact of the matter is this. Most big lenders, Like Wells F. or Cwide have an abundance of assets that arent performing on their books. Lets just say conservatively that a Weels F has 3% of their paper not performing. If they have, lets say $50B in paper and 3% isnt performing, then $1.5B isnt performing, that is why they let it go at auction for what they can get on it and then have options:

Write off the loss (if there is any)
Keep the profit (if there is any)
dispose of monthly costs associated with managing the asset.

It is better for them to just get rid of it for whaqt they can get out of it, because 3% is a huge number (by the way those #'s are pretty close to what they have.)

Does this information help you?