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The 7 "Wonders" of Buying Bank-Owned Homes.

Lately it seems, while out showing bank-owned properties, many that are still in "dare we enter" condition, Buyers tend to ask many of the same questions:

Wonder why they put a wall here?

Wonder what they were thinking when they picked that color?

Wonder why they painted the windows black?

Wonder why there is a brick wall behind this door?

Wonder if they got a permit?

Wonder where they had the stove?

Wonder why they lost the home?

Who knows why they did what they did!

For some reason - many people feel it's important to know the story of a home. It's fine for clients to explore and let their imagination go about what a house looked like pre-bank-owned. For many, it seems to allow for the emotional connection needed to move to the next step of "saving the home" from it's current condition and making it their own.

At the same time, it's important for us to help Buyers find a balance between wondering about what a home was, might have been, or who the previous owners were and moving them toward wondering more about the true condition, the potential and vision of their family making that house a home.

Gabrielle (Kamahele) Rhind - 2009. If you want to reprint parts of this - just email me for my permission rhindohana@msn.com. Buying or selling Tucson Arizona Real Estate? Click info@gabriellerhind.com and let me know how I can help you! Or visit www.BuyMyTucsonHome.com.

Gabrielle (Kamahele) Rhind - 2009. If you want to reprint parts of this - just email me for my permission rhindohana@msn.com or TucsonsRealEstate@gmail.com. Buying or selling Tucson real estate, Mt Lemmon, Tucson bank-owned homes, Tucson rental homes, or Tucson lease option homes? Visit www.BuyMyTucsonHome.com.

Posted by Gabrielle (Kamahele) Rhind, Associate Broker on 06/02/2009 06:31 AM

Comments (62)

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62 Comments on The 7 "Wonders" of Buying Bank-Owned Homes.

JUN

Gabrielle - I think that for many buyers it is their nervous energy making them ask the questions. they don't really care what the answers are it just helps them move through the process better.

Good points. I, personally have moved so many times in my life that I only see a house as an investment. Buyers need to realize that adding their own touch and living there with other family members are what will make that house a home. It is very important to help them see through that!

I showed some foreclosures where it was clear . . the previous occupant was very MAD when they left this place. . .

Does seem a part of normal buying decision process to ask those questions while deciding if it's a good fit for them.

Those kinds of questions make me think of another: "Wonder if we should get a really good home inspection before we buy?"

Nice post thank you for putting a personal face on a process that has become so mechanical lately

Very true that buyers seem to be more inquisitive when it comes to bank owned homes.

Good post. Most of the time we do not have such information if it is a bank owned home.

I try to ask, where would you put your sofa? What color can you see this room, nice and light blue, breezy and let the sunshine through those windows over there? Build a new vision for them. Their questions are sometimes answered with questions, What would you do to make it your own? better? Sometimes it moves them past the moment to a new moment of .. when its mine and loved and cared for it will.....

Gabrielle,

As an agent I wonder about a lot of things when I show properties too. What were they thinking when they did that?

Of course the question so many buyers ask about regular resales, "why are they moving?"

Rich

You are soooo right. I go throught the same questions. And, my answer is: It does not affect the value of the home. And, it's just not right to ask those personal questions to previous owners. (I had 1 lady want me track down previous owner and ask her these questions) HELLLLOOOOO......It is painful enopugh to lose your home for any reasons, but to go back and open up sore wounds just so someone can know the emotional history before they buy?????

Good post

Its all a big wonder for buyers on REO. In my town I usually know the story or I can get it and fill in the blanks for them.

How about this, I wonder where this Chimney goes? And how long will it take to fall down since it is not braced properly? Some of the REO's are as is without inspections. That gets spooky because it puts you in the position of being an inspector and strutural engineer which you are not. Cosmetics I can handle.

I get called in to fix a lot of these types of homes for our investor clients and friends. My questions usually look like:

How did this not burn down?
Why do people keep using the toilet after the water is shut off?
Wonder if there is mold in the wall?
Think the ventilation fans actually are connected?
Wonder how long the squatters were living here?

It is pretty gross to see the living conditions some people will put up with!

And if it's not a bank owned home, then they wonder why the owners are selling. Buyers can be overly cautious and then ask questions that come from nowhere.

Nice Blog. All I do is work with investors each day. I have gotten on REO broker list to submit my offers three days in advance before it hits the market. I wonder if this will work.

Most homeowners see their home, not as an investment, it is maybe in their mind the last time they buy and want to make certain that there are getting a good deal and not a lemon.

Bettina

I was very impressed with your post this morning. Thank you very much sharing it with AR. I always enjoy your posts. Keep up the great work.

Gabrielle, I hear those 7 wonders in my market too! Good post, enjoyed reading it!

Gabrielle, good "wonder" post. Maybe the home buyer was thinking out loud too!? Or maybe they were rhetorical questions to anyone who was listening or to themselves? Who knows, but one thing is for sure, these questions can be asked at any type of home sale, I would think. I think the same thing when I do an inspection, but ask only to myself. Hopefully the questions don't interfere with the client who may be looking past the obvious and imagining what the future of the home can be for them.

Gabrielle,

Another question is how do I pay for the needed repairs? Renovation loans can provide that answer. One of the issues you brought up was did they have a permit. This is a huge issue and can be a deal killer.

I have had transactions kept alive with renovation financing and other deals have died with the permitting issue. For the most part you can knock down an illegal structure but if it isn't going to translate into added value then the cost cannot be too high. For example a converted garage can be rebuilt or a carport knocked down but when the converted garage was marketed as a 4 bedroom and is now a 3 bedroom that presents problems with comps. Often times the asset manager would rather just sell to a cash buyer than deal with these issues.

Mike

Bank owned homes have been pretty interesting. it is sorta like forest gump and a box of chololate you never know what your going to get.

I showed a short sale home recently and the previous owners took out all of the flooring! My clients were asking the same questions: Why did they take the carpet?

Buy you are right, it is our job, hopefully, to try to help our buyers see beyond what happened with the previous owners and find the potential of the home. Most of the neighborhoods where I have been showing short sale properties are still great and I try focus a bit on them.

Interesting take on the many questions that buyers (and agents) have about REO's. I myself have wondered "why" about quite a few things as I've shown homes to buyers.

Wow Gab, What a great post. I bet this started your day out on a positive trend... Congrats :)

I remember showing a house not an REO but it was an estate and wondering about the big black stain on the carpet was... The buyers and I joked about it being an oil stain... this was back before buyers agency so I am working as a sub agent of the seller but I realize it is a blood stain NOT oil. duh yeah I remember that street's name being in the news... murder.

Maureen, I've had clients who, whenever viewing an estate home, asked if the person had died there. I like Gale's answer of turning the questions around to help the buyers see themselves in the home and letting go of its previous history.

Some bank owned properties are in great shape and some are not the best thing to do is prepare your buyers~

The story behind a house is the emotional link some people need to purchase. Obviously everybody is different, but doing to an REO when it has been destroyed is going to be tricky in itself.

Not everyone sees things in "black and white" some people have emotion to go with the process and it's hard to think of the place you are moving into as a home instead of "house"

Patricia Aulson/ Portsmouth NH Real Estate

Good Points. It is very tricky when the house is all destroyed as Morgan said. It becomes easier when the buyer has that ability to see beoynd what is currently there, but that his true for most houses.

You here that on every property, just different questions. I ask, why does it matter? Are you not going to make an offer because the couple got divorced or because someone lost their job and couldn't afford it anymore. Do you like the house or not?

I think many of the buyers have a sense of sadness for the previous owners of REO properties.

Bank owned homes come in all flavors from neat & tidy to wrecked or falling down. Each home is an "opportunity home" in their own way.

Great post.. I was recently showing clients Short Sale/Bank Owned properties, and they voiced the "wonder" as to why the homes werent perfectly cleaned & in the best shape. I let them know that sometimes these sellers are facing bigger situations than they can handle, i.e., job loss, medical issues, divorce, etc..and having a perfectly staged home is not on the top of the priority list.

I think the above posts re-directing buyers to the "possibilities" are an excellent idea!!

Good post. I think many are just thinking out loud and trying to visualize how it was and how they can make it. I like the idea to ask outright - what would you do with this space? Or offering a suggestion on how something could be done or remodeled and estimated cost if you know. Even though there are tons of foreclosures now, it is still alien to many of my buyers and they think about the family or person who left the home behind.

Good post.

HELLO TAMI! Nice comment -- great reminder that generally it's not a happy situation when one loses their home and the condition usually reflects that! Nice to have you stop by -- Gabrielle

HELLO VICKIE! Very nicely said! -- Gabrielle

HELLO CAMERON! Very true - makes it more important to allow those Buyers to reflect on the wonders -- thanks for stopping by! -- Gabrielle

HELLO MICHAEL! I have had a client that didn't want to benefit from someones misfortune and walked away from a house he liked! There is a first for everything! Thanks for stopping by -- Gabrielle

HELLO JAVIER! Very true. Thanks for leaving a comment! -- Gabrielle

HELLO PATRICIA! Couldn't agree more! Thank you for leaving a comment! -- Gabrielle

HELLO MORGAN! Even with non-bank owned homes - I agree - many people do need that emotional connection! Appreciate your comment -- Gabrielle

HELLO JESSICA! I agree! Thanks for stopping by and leaving a comment! -- Gabrielle

HELLO DIANNE! Ohhh - that's always a tough question! One that I think we all "turn around" to something more positive! Thanks for the comment -- Gabrielle

HELLO MAUREEN! I hate when that "light bulb goes on" in those situations! Too funny! -- Gabrielle

HELLO PAUL! Yes it was! I went for a run - talked to Tucson Kent on my way home and found out this story was featured -- it was a positive morning! Nice to see you here! -- Gabrielle

HELLO WILLIAM! I think many of us share your thoughts - from time to time you can't help but to wonder! -- Gabrielle

HELLO TERRIE! I love that carpet question! It's all about just looking for the positive side to things! Thanks for leaving your comment! -- Gabrielle

HELLO MARCUS! Very true! I appreciate your comment! -- Gabrielle

HELLO MIKE! Nice comment! I just went to look at a home this morning and the Buyers are considering the renovation financing! Appreciate the insight! -- Gabrielle

HELLO DENNY! I agree - hoping the Buyers look past the condition to see if there is potential for them is the key! Thanks for stopping by -- Gabrielle

HELLO MIKE! Thank you and glad you took a minute to leave a note! -- Gabrielle

HELLO ERIC! What happened to the rest of your comment??! -- Gabrielle

HELLO BETTINA! Nice perspective -- thanks for stopping by and leaving a comment! -- Gabrielle

HELLO HARRY! Let me know if it does! -- Gabrielle

HELLO ED! Very true -- kinda like when you are selling a used car - people always ask that same question! Thanks for stopping by! -- Gabrielle

HELLO CHRIS! This was too funny! Especially the toilet one! One time a client brought their child to a showing who needed to use the restroom; after about 1 minute - the mom came back and said, "We'll just use the backyard - it might be safer!" -- Gabrielle

Foreclosures are often interesting. And many need work to even be somewhat inhabitable. But there are bargains out there for those that are not scared of doing a little work. The key is to get them at a price to make up for the extra work or expense of making them "right" again.

Hi Gabrielle.....it's the old WHAT WERE THEY THINKING????? Yes their sometimes dumps and dreams in the making....and cheap. That's what the buyers are loving these days

Gabrielle, good post and congrats on the feature. I think you've missed a few, though.

Wonder if they actually lived in this with it this nasty?

Wonder what that funky smell is?

Wonder just how many cats were in this house?

Wonder why the agent said this was only "a little" TLC?

Wonder if the bank has actually seen this place?

Wonder if the bank really thinks that they can get that price?

Wonder why we're even looking at this dump!?

:-)

true....and I Wonder why there were 37 bids on a bank-owned the other day! Competition in Denver

Jonathan

I just tell them the truth. Same answer for every question: Because they were crackheads.

Hello Gabrielle. Great topic and posting. Isn't there a saying that goes something like... Some people make things happen... Some people watch things happen... Some people wonder what happened.

I wonder about things too, like are they ever going to decide on a house so i can get paid. LOL

Some questions - about color choice, design, condition, are expected. These types of questions are not restricted to REOs. Buyers often wonder about the history of the house. REOs simply take the questions in a new direction. The change is the type of questions. Instead of "Why are they selling?" the questions may be any of those questions posed in the preceding comments. The point is: very few buyers look at a property dispassionately and make a decision based on the merits of the property. (Investors excluded from the preceding generalization.) Decisions to buy are often made on the basis of emotional connections. Asking questions about the history of the property helps the buyer to decide whether that is the right property for them.

I think each property has a story and a spirit of it own and it is kinda fun to know the history of a home.

Liz

So many people tell me they want a fixer upper, until the see one. Some of the really ugly homes do not really need that much work and can be real bargain. Paint and flooring does a lot.

The only real wonder is should they buy this house at x price.

JUN

Gabrielle,

You have such a unique, engaging way of writing your posts. No wonder you're featured!

Wonder why they painted the windows black? (Wonder if they were cooking meth?)

Mike in Tucson

GOOD MORNING MIKE! Nice to talk with you yesterday and see you here early this morning! -- Gab

GOOD MORNING MIKE! That question comes up as well! Thanks for stopping by! -- Gabrielle

GOOD MORNING GENE! Very true -- it's all in how you see things! Nice to see you here -- Gabrielle

GOOD MORNING LIZ! I agree - what's that old saying - something like -- if these walls could talk --they would have a great story to tell! -- Gab

GOOD MORNING JOHN!I agree - these questions aren't limited to bank-owned's - the questions are just more entertaining with REOs! Thanks for your comment - it's important for us to remember that Buyers do rely on emotions for decision making and it's out job to help manage it! -- Gabrielle

GOOD MORNING AARON! Making that decision is so hard for so many people! Good luck to you! -- Gab

GOOD MORNING JIM! Nice one! I love it! Thanks for stopping by! -- Gab

GOOD MORNING ELIZABETH! Ha ha! -- Gab

GOOD MORNING JONATHON! That's fierce competition alright! -- Gabrielle

GOOD MORNING ROGER! Great "wonder" questions - thanks for the input! -- Gab

GOOD MORNING ANNA! Nice comment - some homes sure do give Buyers alot to dream about! -- Gab

GOOD MORNING MARK! You bet - getting it at a price that is right! Thanks for the nice input! -- Gabrielle

GOOD MORNING CLEO! Very positive ways to re-direct the wonder questions -- thanks for sharing your thoughts! -- Gab

GOOD MORNING JOE! What a scary question "Where does the chimney go?"! -- Gab

GOOD MORNING LAURA! How wonderful that you can do this for your clients -- nice to see you here -- Gab

GOOD MORNING MIRANDA! Going back to a previous owner is pushing it - some things are better left unsaid! -- Gabrielle

GOOD MORNING RICHARD! Another great question (Why are they moving?) that makes me smile! Nice to see you here -- Gab

GOOD MORNING GAIL! I love your words "Build a new vision"! Thanks for stopping by and taking time to write your comment -- Gab

GOOD MORNING GITA! If Buyers find out about the previous owners it's because a neighbor stopped by during the showing to tell us all about them! -- Gab

GOOD MORNING BILL! Yes and they ask the funniest questions somethings too! -- Gabrielle

GOOD MORNING CHARLIE! Nice to see you here -- and you are welcome! -- Gab

GOOD MORNING MARK! Yes it does - thanks for stopping by -- Gab

GOOD MORNING FERNANDO! Oh yeah - those tend to leave you "question-less"! -- Gab

GOOD MORNING CHAD! I agree! Thanks for stopping by and taking time to write your thoughts! -- Gab

GOOD MORNING LAURA! Very well said - it's just a process many need to go through! -- Gab

Alas, Gabrielle, I was one of those buyers with tons of questions when I purchased my first home years ago. Now that I know what goes on on the other side of the table, I cringe when I think of my behavior. :-)

Wow, Gabrielle. Congrats on the feature and the tons of responses. I'm now wondering about your next post!

I WONDERwhy in the world did the owner plant that IVY all over the yard and why all those trees. This is not a forest!! or is it. And I wonder WHY ME?

Wonder where are all those Luxury properties that require little of no work and comes with a large sales price?

Wonder when the gates are really going to open?

WONDERful post!

Since I list HUD owned properties it seems I live in some of these neglected homes. The one big questions I get is, "How long has the property been empty." My response is that if it is very important "we can ask an neighbor, they will usually know the history of the house." I have never had someone say, "let's go ask."

Great post! Sometimes there's just no telling what people are thinking when they do what they do...often it just boggles the mind.

Gabrielle, I hear those same questions when showing not bank owned homes.lol Like they think we have the answer. I think if most were showing their homes they may be a few as to why questions also. Rosemary Brooks was funny "Why Me?" Being who we are and different is what makes this business great. If we all liked the same things we would all want the same house, spouse, car, etc. Now that would be a challenge.

Good points Gabrielle....you never know with properties these days!!

Best, Dan

JUN

Gabrielle. I often get caught wondering these things when I should be crunching the numbers or talking to my client.

Love the headline! I think that people are just curious while they are saying stupid things! I often feel like saying, who cares about the tire in the refrigerator, is the kitchen size large enough? Who cares who lived here? Wolves that raised humans obviously.

JUN

Yes, many people and even myself wonder what some of these home owners were thinking...many times I don't think they were thinking. I've seen some weird stuff in my time showing REO's. It's just part of the fun I guess :)

JUN

Best question I ever heard was: " How did they get that 10 foot around tree stump and all it's roots in the door and wonder what they were using it for in the living room??? "

Regards,

Kenneth

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