This is the third post covering questions asked by attendees to the Foreclosure Buying 101 Webinar and RealtyTrac website demo.
View the most recent recording of the webinar.
In the first post we covered the topic of avoiding foreclosure, in the second post we covered the topic of buying at foreclosure auction, and in this post we’ll look at the topic of buying bank-owned homes through the filter of three questions asked during recent webinars.
Before addressing these questions, let’s quickly lay the groundwork for what we’re talking about when referring to bank owned homes. These are properties that have gone through the foreclosure process and have been repossessed by the foreclosing lenders, most commonly through a public foreclosure auction where no third party bids on the property, but also through deeds-in-lieu of foreclosure, where a homeowner in default voluntarily deeds ownership of the property to the foreclosing lender — often in exchange for some cash to walk away with.
These bank-owned homes are known commonly in the industry as REO homes, standing for Real Estate Owned by the foreclosing lender.
1. What is the best way to find the REO manager at the bank listed on the property details page on RealtyTrac?
The REO manager referred to in this question might be one of several people working at the bank who is responsible for managing and ultimately selling the REO inventory owned by the bank. Unfortunately this almost-mythical figure can sometimes be as difficult to locate and contact as a unicorn — particularly when dealing with a large lender.
So the first answer to this question is that you’re better off finding an REO manager at a smaller, community bank, particularly one in your area where you can actually go down to the bank physically. But in the case of a larger lender, the best advice is to put on your best detective hat and start combing the Internet for any scrap of information on the bank, calling any phone number you can find associated with the bank, and even faxing and mailing contingent offers to the bank, hoping that those will get through to someone responsible for the property.
2. How can I find the foreclosed homes for sale available for making online offers on RealtyTrac?
The main reason you might want to contact the REO manager mentioed in the last question is if you are pursuing an REO home that is not yet listed for sale —which is very likely given that RealtyTrac estimates only 15 percent of the unsold REO properties nationwide are actually listed for sale.
If you want an easier path to purchase a bank-owned property, you’ll probably want to focus on foreclosed homes listed for sale. There are two ways to find these on RealtyTrac: one is to simply click the “Satus” column at the top of any search results page, making sure you’re on the “Bank-Owned” tab; and the second is to click on the “Bank Hot Properties” subtab under the “Bank-Owned” tab.
3. What is the difference between REOs for sale and bank hot properties?
Both of the search methods described in question No. 2 above will help you find REO homes listed for sale with a real estate agent; the bank hot properties simply represent a sub-category of these listed REOs that allow for RealtyTrac users to submit non-binding online offers directly to the listing agent or REO manager. Here is a video showing how to use RealtyTrac’s exclusive Foreclosure-MLS Match feature to find bank-owned homes listed for sale.
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