Updated almost 10 years ago on . Most recent reply
Getting a bank to negotiate an unlisted REO?
There is an abandoned REO across the street from where I live and managed to get the full story from a city commissioner. He informed me that BOA foreclosed on it almost 10 years ago and has never tried selling it. The power is still on and the bank sends someone over to cut the lawn; likely to avoid city fines. The comissioner wants it fixed up and occupied so the city doesn't spend years trying to get it back through condemnation.
Is there anyway to get the bank to discuss selling it?
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There are a lot of those properties around. If it's not listed, it's not for sale. That can happen for a variety of reasons. Some of those properties are known as "zombie foreclosures" because they are in limbo. The bank foreclosed, so the homeowners had to move out, but the bank can't sell the house because they can't prove they own it due to faulty paperwork from all that robo-signing that went on during the "anything goes" days.
That property you saw might have been sitting vacant for years and it might sit vacant for years to come. Once the bank has all the paperwork in order and they can sell the property, it will get listed on MLS or go on an auction website or both. There's some sort of regulatory requirement that the property be widely advertised, so they couldn't just sell it to you. If you could just reach out to the bank and buy an unlisted REO like that, the house you saw would have been snapped up by someone already. Trying to figure out how to buy that vacant REO goldmine is something a lot of new investors do. People ask that question all the time. I did it, too, and then somebody explained to me what the deal was.
Perhaps someone else can offer some more or different insight, but that's the deal with those long-vacant REOs as far as I know.