Questions on buying REOs

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terago_IHB

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Does anyone have experience with buying an REO property?





I'm wondering if it's better to deal direct with the listing agent or go thru my own agent?





If I go thru a flat fee agent, like e-liststate.com, she charges 3K and rebates the rest back to me.





I'm wondering there are any concrete advantages of dealing directly with the listing agent who may not rebate anything back to me.





I may get "inside" info if I dealt direct, like offers outstanding, highest bid, how low the lender willing to go, etc.





Since REOs are sold as-is, what extra contigencies should you put into the contract?


and what extra inspection should a buyer get if the property were trashed by the previous owner, to check for water damage and/or mold problem?








I'm welcoming all feedback but real experiences would be great, thanks.
 
<p>Since we're on the topic of REO's...</p>

<p>I have a friend who is in the REO business. He said business is booming, from the inventory end obviously. Problem is there are no buyers (obviously again), but many of the offers they have gotten still have been rejected by the banks. He didn't really know why.</p>

<p>Is someone here more familiar with this topic and understand why banks would be so reluctant to let go of properties? Banks' inventories are increasing day by day, so why exactly aren't they working feverishly to reduce this instead of going from a bank to a REIT?</p>

<p><img alt="" src="http://bp2.blogger.com/_A2btxwmKXXg/RrChc4sRz6I/AAAAAAAAApM/sz01EBzRBdE/s400/foreclosures.gif" /></p>

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oc-conservative,





There are no buyers for those REOs because the asking prices are still too high, especially most REOs are sold AS-IS and often trashed by the previous owners


so the new owners have to spend extra to fix them up.





I'm also wondering why banks are so reluctant to lower the prices to get rid of the REOs quickly ... maybe fearing of bringing down the comps?





If they don't sell then eventually they end up at auctions at even lower prices so that puzzles me.
 
awgee,





Are you saying I should deal direct with the listing agent?





Assuming a fixed 6% total commission, the net to the seller or the bank in this case is the same whether there's 1 or 2 agents involved.





But if I went with a flat fee agent I'd get back 3% - 3K, for a 700K house that's 18K back for me.





I'm just wondering if dealing direct with the listing agent gives me any benefits that would outweight the 18K that I'd have got back.





My gut feeling is no unless the listing agent works extra hard and convince the seller to accept an offer lower by more than 18K.
 
terago - Your gut feeling is good. Go with it. Figure how much you think you want to pay for the property and then subtract another 3%. If there is no other agent involved, the first thing the agent will do, if they have any brains at all, will be to offer to renegotiate the commission with the seller. Remember, the agent does not get paid unless they close a sale, and there is no agent out there stupid enough not to realize that 3% of any amount is better than 6% of nothing. This is not a new concept. It is done every day. And if you are unsure about an appropriate amount to bid, start low. You can always offer more later. And most importantly, what do you care if the agent says the offer you make will offend the seller. The asking price is obscene and offensive.
 
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