In the spirit of consumer awareness.
This morning, I received an online lead from the 3rd party vendor that our "big broker" contracts with for foreclosure leads. The customer was interested in a property that was listed as "bank-owned", or "REO". However, the property is not bank-owned.
Now, I don't think for a minute that the vendor is being deliberately misleading, but, this property was purchased by a real estate investment firm at a trustee sale in Oct 2011 and listed for rent from Dec 11-Feb 12. The listing was then withdrawn from the MLS, probably because they either rented outside the listing agreement, or they are readying it for sale at a later date.
Now I have to call or email the customer and explain to them that the property is not actually for sale and why. As a RE/MAX agent, I feel that this sort of thing damages our credibility as professionals, and it perpetuates the stereotype that we like to pull the old "bait and switch". WE DON'T. Its a matter of public courthouse filings data being processed by machines that can't tell the difference between an investment company and a financial institution. The only properties available for sale by real estate brokerages are listed in the MLS. Otherwise, they are for sale by individuals or companies unrepresented by a broker.
To get the low down on how these sites list property and the entire foreclosure process, you need to talk to a live human being. A realty professional can explain the general steps in the foreclosure process from notices to trustee sale, to REO (the state of being bank-owned) to market. Oh, by the way, a pro can also tell you the ways to AVOID foreclosure altogether. There are about 9 different ways. CAUTION: Only a lawyer can give you legal advice!
You can search a bank's website for available homes, but banks do not sell properties directly to consumers. They list their assets with reputable brokers for sale through the MLS to the public. (Banks do, however offer properties for sale through a trustee when an owner defaults- the property is sold at the courthouse steps or a "sheriff's sale". If there are no buyers, the bank becomes the owner. After that, it is listed for sale by a contracted broker.)
Even though 97% of consumers start their home search online, the vast majority end up dealing with a human being professional to get it done. And who wouldn’t prefer a human over machine?