How to buy bank owned house that's not for sale

8 Replies

I stumbled across a house I'd like to buy and live in but it is not listed for sale; it hasn't been on the market for years. On the county assessors records, it says Bank of America, Plano TX owns it 100%. It appears it may have been foreclosed years ago and the bank still owns it and is not doing anything with it. Any advice on how to inquire on such a property? TIA

I found one also, but owned by Chase.  I have contacted the local branch, looked online cannot find anyone who knows anything.  I am waiting on a response from a letter I sent to the address, where tax bills are sent.  Keep me informed if you find another way to contact them.  

I think sometimes, a property falls through the cracks and they are forgotten about.

The BofA's, Chase's and other Too Big's of the world have some pretty sophisticated systems in place to monitor and manage REO. I have an REO in my portfolio that I can't do anything with because when I foreclosed, a deed showed up with another owner and now I have to sue the other owner, win, then sell the REO. I've had it for over a year. Looks like another year before I get to trial and probably another year after that until I can do anything with it. In the mean time, values are going up and I get to deduct the cost of managing the asset from any proceeds I may have to share with this other shadow owner. Moral of the story, yeah, while it sucks, there could be a million reasons why a bank owned property appears to just sit. Could it have fallen through the cracks? Maybe. Might be something more legitimate though. Good luck to you in your search.

I can say, whenever anyone tries to contact my department to ask about or purchase an REO, I kindly convey to them that unless there is a sign on the front's isn't for sale and when it is for sale, the agent's contact information will be on the sign.

@Kim Forgione

Banks have their own internal process for cleaning the title and then getting a property ready for sale.

Any number of reasons can tie up a property in legal issues like other claims to the property or a previous owner declaring bankruptcy.

And the bank will also hold off moving inventory until they feel like it’s the right time to put it on the market. Banks don’t want to flood the market with inventory and lose potential market value.

How can you buy it before it reaches the market? You can’t. It’s against the bank’s internal policy. Selling a property off market will get a bank less money than selling it to the open market with an agent, so the bank’s policy is to always list it with an agent on the MLS when they are ready to sell.

If you network with asset managers in small banks you might be able to get a list of properties and work a deal. You can’t really do that with large banks.

Large banks offload their REOs through regional asset managers so there is no way to network with anyone at the bank itself.

How do you network with small lender/bank REO managers? You don’t unless you used to work there or you happen to be a big enough player in buying REO properties that they know your name.

Originally posted by @Ron S. :
Originally posted by @Matt K.:

go hardcore and try adverse possession (not serious, this probably won't work).

Could work!? Open hostile and blatent possession, pay taxes, etc... 

 go big or go home...

The 23-year-old has moved into an empty $2.5 million mansion in a posh Boca Raton neighborhood, using an obscure Florida real estate law to stake his claim on the foreclosed waterside property.

The police can't move him. No one saw him breaking into the 5-bedroom house, so it's a civil matter. And representatives for the real owner, Bank of America, said they are aware of the situation and are following a legal process.

I am with @Christopher Phillips on this one. If you find a vacant, neglected property that is owned by a person then there is plenty of things you can do. If you find one owned by a bank....... forget it until it gets listed at market rate in 1-3 years. I have people every week say "I am sure the bank would love to sell it to me cheap because it is costing them money now". Which sadly is not the case. Yes it sounds that way but they need properties that are taking a loss to offset their winners. They tack on every late fee, every time they have someone do a property check, every visit by a winterizer/lawn cutter, every tax bill every inspector, insurance costs.

When that is all done they want every penny they can get out of it. So they want it to go on the MLS and get in front of every possible buyer. So if a bank owns it, my suggestion is to find something else. Now if Fred Smith owns it from out of state...... That may have a different outcome.

Good Luck!