Are Bank Repos the Best "Deals" for Buyers?

By
Real Estate Agent with Rancon Real Estate

Today as I was wheeling around town, I saw one busy intersection papered with signs saying - BANK REPO INFORMATION! All of the signs were pointing to one of the larger agencies here in Temecula/Murrieta California.

I was very put off by the signs. I felt that consumers (Home buyers) were being pointed in the wrong direction. I realize that the normal consumer "thinks" that they can get the best deal on repo, or bank owner property but as Realtors, we almost always realize that this is not true!

Bank owned property is often priced HIGHER than it was while it was still i n Short Sale mode! There are often repairs to be made and the home come with no "Disclosures" since the bank never lived in the home and cannot be responsible for disclosing information they don't know! This week on our Realtor Tour we saw a repo that had all of the carpet and baseboards gone - there was a empty pool that the surface was going to have to be redone! All of the money to redo this home would be coming out of pocket!

I often see Short Sales that are a good value. The people haven't been out of the home so long that everything is dead and if it has a pool - it is still viable. (A Short Sale situation exists when a home is being sold for less money than the previous owner owed on the home --- a realtor neogates with the bank to work out a win/win situation before the bankrupcy takes place.)

Does anyone see the same things I am seeing on the value of the REPOS or are they a better deal in your part of the country?

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Rainmaker
805,546
Chris Griffith
Downing-Frye Realty, Bonita Springs, FL - Bonita Springs, FL
Bonita Springs Listing Agent
My personal opinion is there are better deals than repos.  I tell anyone looking for one in this area that due to the inventory there is an awesome deal in almost every neighborhood.  I think some people think they have to get a deal by getting a bank repo.  It's more of a "get one up on someone else" mentality.  If they could see someone crying at a closing table or scratching their nails down the courthouse steps it would mean more to them.  I don't get it.
Jul 08, 2007 11:26 PM #1
Rainer
434,914
Scott Daniels Florida Real Estate 2.0. Agents Earn 100% Commission.
Florida List For Less Realty, Inc. Broker/Owner. - Cooper City, FL

Sandra,

It depends on the type of property and the actual condition of the home. Banks are often out of sight and mind when it comes to price.

Jul 08, 2007 11:53 PM #2
Rainmaker
89,322
Paul Moye
Benchmark Realty - Franklin, TN
Broker, GRI, SRES
REO properties are always priced at are slightl above market price and then as time moves forward the work like an owner and reduce the price. The best way to find a value is before the foreclosure process really gets steaming along and make a deal with the owner and allow the bank to see you will close and secure their payment by a certain date.
Jul 09, 2007 01:40 AM #3
Rainer
11,216
Tina Smith
Metro Brokers/GMAC Real Estate - Lawrenceville, GA
I'm in Gwinnett County GA.  I don't see many signs pointing out bank owned properties, but I agree that they are not the best bet for buyers.
Jul 09, 2007 01:47 AM #4
Rainer
103,100
Angie Vandenbergh
Crye-Leike, Realtors - Memphis, TN
A Crye-Leike Blogger

I don't know very much about foreclosures... but it would seem to me two things.

1) If there are problems with the property, that require a big expense to repair, that could be factored into the negotiations to help adjust the price.

2) The 'deal' would probably have something to do with how much money the bank has in the property. There may be foreclosures where the previous owners had paid enough down on the mortgage that the bank is able to get a higher sales price than the money they are at loss at for the loan and reo possession expense or there may be times when the amount owned is more than the value of the property. I think the latter is probably the more frequent, but I don't know.

I agree with your general principle though.... an reo is not necessarily a better deal, just a different deal.

Jul 09, 2007 04:27 AM #5
Rainmaker
703,846
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Hi Sandra, I "discovered" you because I just came up against you in the "California" listing on AR.

As for REOs, you have to remember two things: Bankers are jerks and they have to get the REO off their books asap.

The listed price has absolutely nothing to do with what they are "willing" to take. A low-ball offerf from a qualified buyer will probably be accepted. Give it a try.

Bill Roberts

Aug 03, 2007 05:13 AM #6
Rainer
22,791
Sandra Williams
Rancon Real Estate - Temecula, CA

Bill, Thanks for the advice . I agree that the bankers don't have a clue! I am working on a hard Short Sale right now --- $100,000 under amount owed! If they don't end up working with this one, it will be back as an REO so they can spend another six to nine months, trying for more than we are looking at now!

 

Aug 03, 2007 04:56 PM #7
Rainmaker
703,846
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Hi Sandra, I have done a whole series of posts on short sales. You might want to read them. It could help you in your short sale experience. Not just by reading my post, but all the comments too. A lot of good useful information is there.

You will find that some banks just "will not play ball." They are best avoided. Too much of your time and effort is spent with little or no chance of success. Not good for you and not good for your clients (buyers and sellers).

Bill Roberts

Aug 04, 2007 02:40 AM #8
Rainmaker
325,871
Esko Kiuru
Bethesda, MD

Sandra,

Bank repos can be good deals, but you have to do your homework with them. Nowadays they are not priced as nicely for the buyers as they used to be, yet there still are opportunities. Short sale can be a pain if the bank involved is disorganized or otherwise distracted. The process can take months, so who has the time for that.

Aug 04, 2007 10:55 AM #9
Rainer
30,892
Ryan Case
Pacific Servicing - Temecula, CA
I am a local in Temecula, Ca 92591 and I for one think Bank Repos can be a lot better than regular sales. They often are priced 20-30% below what they last sold for, and normal home owners do not have the luxury of doing this. Also you can often get loaded homes where people fell on hard times, foreclosed upon, and you end up getting a steal of a deal! I think Realtors (some not all) avoid them as there are more disclosures, less commissions, and they're overall not the easiest transactions to handle.
Aug 05, 2007 05:24 AM #10
Rainer
22,791
Sandra Williams
Rancon Real Estate - Temecula, CA

Ryan,

Sorry that I can't agree with you! Foreclosures, or REO's are a slam dunk to sell! There is no work, except the normal paperwork and a couple more disclosures, on the REO's. 90% of the Short Sales are in much better condition. They are a lot more work for Realtors. :-)  Have you had the opportunity to preview the latest wave of foreclosures? There are some real fixers out there!

Aug 06, 2007 03:07 PM #11
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Rainer
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Sandra Williams

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