Driving for Dollars: House owned by the Bank now (foreclosure)

12 Replies

After driving for dollars today I found that one of the properties was foreclosed in April of this year.  It shows the owner as U.S. Bank.   My question:

How do i make an offer on this property? I went to US Bank's REO page but it is not listed there for sale. Do I need an agent for this?

The other house I found shows it was foreclosed by Chase in August of 2010! This is also not listed on their REO page. It's been 5 years, what could possibly account for it not being listed?

Short answer is forget it. Set an alert to notify you if it is listed but other than that its a waste of time

Why would it be a waste of time? What does it mean if it can't be found on the banks page?

It means it isn't for sale. If it were a small local bank it might be worth pursuing, but I'd bet $20 you won't even get anyone to answer the phone at a national REO department.

Mimi foreclosures that are owned by the big banks go through asset managers and you have to wait for them to be listed to buy them.  They don't entertain small investors who want to buy from their inventory. A small bank with fewer branches may be willing to discuss it's inventory with you but not a big one.  So yes any chasing of the big bank reos would be a waste of time until they hit the market. 

@Mimi Booker  

I agree [email protected] Martin but let me explain why. 

National Banks have procedures that they follow when selling foreclosed homes - It isn't the same as dealing with an owner who can review you proposal and instantly make a decision. They are also not a motivated seller. It is true that banks don't like holding property, however, Its very likely that before this property is sold, they are going to have it appraised (or a BPO at a minimum) and put it on the market with a realtor to obtain as many bids as possible in order to recover as much money as possible. Over the last 2 or 3 years, it seems that most REO deals are 'meh' at best.

Additionally, The banks will sell the property when they are ready to, which isn't necessarily at the first chance they get. The last flip I purchased was a REO and our closing was delayed two months because the bank wouldn't signed the papers. When I asked why, they said they needed to push it to the next quarter for financial reasons.

If you're driving for dollars, your prime target should be homes with absentee owners that are vacant. Dealing directly with an owner that can make a decision is critical, especially if you are wholesaling deals. Since they are absentee and the property is vacant, they are likely motivated as well, which helps you secure a good price. 


-Christopher

I did not know this about REO properties! You learn something new everyday!

Easier to sell a hundred to a hedge fund than deal with 1 I presume.

Originally posted by @Mimi Booker :

After driving for dollars today I found that one of the properties was foreclosed in April of this year.  It shows the owner as U.S. Bank.   My question:

How do i make an offer on this property? I went to US Bank's REO page but it is not listed there for sale. Do I need an agent for this?

Well Mimi these days these days these asset companies are up and running.  Used to be you had a shot.  Heres a list of asset managers I found on BP

http://www.biggerpockets.com/rei/reo-asset-managem...

If your interested you can drive by and see what the disposition of the property is you might find out more if you live near them.   What these guys said is mostly true in pre-foreclosure you would be dealing with loss-mitigation.  Some of these lenders are careful with their shareholders.  You have to remember one thing however non-performing notes are losing money.  Be very diplomatic and discreet in your approach.  Deal is after the blowout these asset people really started rolling.  That complicates things but hey life can be complicated. 

Still doesn't explain how that 2nd house, which Chase foreclosed on in August 2010, STILL does not show up in their listings!  Are you telling me Chase is sitting on this house for 5 years and not trying to sell it?

Yes, unfortunately sometimes the banks foreclose then sit on it, sometimes they start foreclosure, then sit and have to back out of foreclosure, and sometimes they do nothing with them vacant and un-foreclosed for 5+/- years. Banks, especially of that magnitude are not prepared or well equipped to handle this. There are a lot of flaws in their process.

Originally posted by @Mimi Booker :

Still doesn't explain how that 2nd house, which Chase foreclosed on in August 2010, STILL does not show up in their listings!  Are you telling me Chase is sitting on this house for 5 years and not trying to sell it?

This could easily be the case. Large banks have an influx of inventory; many are in a log jamb of sorts. There are also cases of 'zombie homes' that sit in states of disrepair for years. The HOs have long since moved, but the bank delayed the actual foreclosure proceddings. Other factors, like title issues, environmental issues (asbestos, oil tanks, etc) can hinder the process. In fact, I have seen foreclosures lingering for longer then 5 years...

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