WHO GAVE THE BANKS ALL THE POWER - REO'S SHORT SALES - VIRGINIA -www.TheGPSRealtyTeam.com

I would love the media to cover this type of stuff.  I had the same issue on a couple of my short sales here in California.  I had one that all Countrywide had to do was waive the prepayment penalty.  The buyer wanted the house under a 1031 exchange.  We were in a time limit.  Wonderful Countrywide said, "no we have a processes and it takes 3 to 6 weeks".  Well we lost the deal and it sold for $95,000 less than the original offer.  Guess they ate more than the prepayment penalty.

I have done two bank owned sales and refuse to do them any more.  The banks are just too dificult to deal with and have no information for you.  They take weeks to answer anything.  They give you an answer and change their mind.  An all around nightmare.

I will not take an REO listing and I resist working with REO buyers.  Let the bank have'em.

Of course the bank has the power if they own the proprty.  As long as what they do is legal, where's the probelm?? 

They don't provide disclosures because they are, by law, exempt from disclosure because they've never occupied the property.  Other properties exempt from property disclosure are trusts, court ordered sales, properties of owners in bankrutpcy, taxes sales and new home sales. 

Settlement with their selected title company is O.K. when they reduce the cost significantly.  A buyer can always have their own attorney attend.  A buyer can even have their own title representative.

They hold on to Earnest Money because, when left to agents and brokers, earnest money is not always handled properly.  They still have to follow the law.  Offer small earnest money. 

You can have a home inspection.  They just don't fix anything.  That's why their prices are below market.  If a buyer doesn't have funds to make repairs following closing, they shouldn't be buying a property with known defects.  No seller has to make any repairs.  Banks are just more upfront about it.

Settlement date is negotiable.  Stand your ground and if the bank insists on a mid-month closing, adjust the offering price if it costs the buyer more.  Mid-month settlements always make sense because title companies are super busy end of the month.

If my buyer is going to save 5-10% off market to put up with these requirement, it's not a bad trade off. 

Just prepare the buyer that if they want to buy a foreclosure, they have to have a bit of patience.

 

In the words of the late great Willy Sutton, He is a bank robber because,"That's where the money is". And where the money is , so is the power

My experience:

1. It is my understanding that the Banks are exempt from Disclosure/Disclaimer for the simple reason that they have never seen or occupied the house, and therefore could have no first hand knowledge of any deficiencies.

2. They choose who is going to handle the Banks side of the settlement - I have never seen one cares who handles the buyer's side. 

3. They like the listing Broker to hold the EM Deposit. I think that is to make sure it is really in Escrow - but I do not know this to be the case.

4. I have some Bank Clients that do allow a 5 day inspection period. No - they generally will not fix anything. If the buyer is looking for that sort of property they should probably not be looking at foreclosures.

5. They do not like to close at the end of the month. I don't know this for sure, but I think it is because there are so many foreclosures, and so many deed issues, that everything to do with this type of sale is done at the last minute. Closing at the end of the month does not give you many second chances to get it done before the calendar page flips.

 

I love working with some banks because they are not emotionally tied to their property.  Some of them have a more realistic understanding of what the market is and are not "insulted" by low offers.  They just say no and the buyer can decide if they want to up the ante. 

It's a simpler, more cut and dried process.  They have a house they want to sell;  I have a buyer who wants a good deal and who understands (and can afford repairs) what they are getting.  And best of all?  Usually the agent listing the REO is in business to get the deal done and not play games.  Many of them are on the brusque side, but hey, that works for me because I just want to get the deal done, too, and not get hung up on everyone's feelings.  ;-)