Buying a foreclosure/REO property without an agent?

Question

Is it possible to purchase a foreclosure property without an agent (via no agency / ministerial acts) in Chicago?

I have purchased other properties without an agent... but not sure if the rules are different for foreclosures.  I found the property myself, and would not prefer to have a buyer's agent essentially collect 2.5-3% from the seller (the bank in this situation) for really doing no work.

John Warren · Answer

@Mitchell J. why in the world wouldn't you want to have an agent on your team? A lot of my clients purchase deals without me being involved, but they consider me part of their team and use me when the situation is appropriate. You can technically buy a property without an attorney in Illinois to, but why would you??? They only cost $600-700, and they watch out for your best interest. The same can be said for inspectors, accountants, contractors, etc.

Russell Brazil · Answer

Actually depends on the REO. Many of them these days require bids to be entered into an online system that only agents can register for. Id say in my market about 75% of reos are in those types of systems currently.

Mitchell J. · Answer

Thanks all - very helpful.  I definitely want and have folks like agents, attorneys, inspectors, etc. on my team.  I've also done several deals with only attorneys/inspectors and no buyer's agent (typically, for these I found and negotiated the deal myself).  Just wanted to understand what the rules are regarding foreclosures - thx!

Aaron H. · Answer

Depending on how they list the property, it's possible. But as the buyer, you're not typically paying the 3%, so who cares? The bank isn't going to give you a discount for not using an agent either way. As long as it's a good deal and you make money, I'd advise not spending any energy caring about whether other people made money too.

John Barrows · Answer

I don't know of any laws that prohibit anyone from buying real estate without a broker. I'm a broker and I buy my own property. I have friends who buy auction and foreclosed properties without a broker so, yes, you can buy property that's in foreclosure without a broker.... people do it everyday......

Vincent Incopero · Answer

@Mitchell J. - The statements and sentiments of @Aaron H. and @Russell Brazil are correct.

The cost of engaging a Selling Broker (a Realtor in your corner) is not a cost borne by you and their compensation is typically set by and paid for from the Seller's funds.

For what it's worth, most REO asset managers engage the services of a Broker to help dispose of these assets. Unless you have an in road with the asset manager, you will probably have to use a Selling agent to prepare and present your offer.

Buying a foreclosure/REO property without an agent?

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