No, Bankrate, your assertions are wrong

By
Real Estate Broker/Owner with 406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty RRE-BRO-LIC-75443

I read a Bankrate-penned article this morning in the "Homes" section of our newspaper which, at least as it relates to my area, had definite errors. The article, found here in its entirety, pertains to tips for buying foreclosures. The article starts off by providing differences between buying a typical resale versus buying a foreclosure. The first two differences, per Bankrate, were:

 

  • Only one real estate agent needs to be involved in the transaction, and
  • The buyer needs to provide a pre-approval letter prior to making an offer.

 

The first is wrong in any transaction, whether it is a foreclosure, a short sale or a "regular" resale. Why is that? Because in general, if a buyer uses only the listing agent, they are not getting anyone to represent their needs*. A buyer should definitely use a buyer's agent in any foreclosure transaction. That agent will be the one to review the comps (a listing agent who is working for the seller will not do this for a buyer), make and negotiate an offer (contrary to the article, there can be negotiation room with a foreclosure), ensure the buyer understands issues associated with the process and what the bank will or won't do and more. The article indicated a buyer should work directly with the bank's broker because "that way, the commission doesn't have to be split between two brokers." How does that help the buyer? It only helps the listing broker. The commission that is paid from the proceeds of the sale are the same regardless of the number of agents involved, and it certainly makes sense for a buyer to use an agent that can assist him/her. 

 

The second item above is not a difference between a regular resale and a foreclosure. Again, every single transaction, whether a foreclosure, short sale or regular sale needs a mortgage pre-approval prior to making an offer or a proof of funds document if the buyer is paying cash. So stating that this is a requirement only for foreclosures is incorrect.

 

Bottom line, a buyer would have a much easier time purchasing a foreclosure home using the services of a buyer agent, rather than calling listing agents trying to find appropriate representation. Also, a buyer should always have a pre-approval in place prior to shopping for a home. Bankrate is once again incorrect.

 

----------------

*There are states with "transactional" brokers who assist both the buyer and seller, and there are also agents who provide "dual" representation to both buyer and seller; however, neither of those are a true buyer agent who would represent just the buyer.

 

Posted by

 

Kat Palmiotti, The House Kat

Licensed Broker, CBR®

 

Blackstone Realty Group - brokered by eXp

P.O. Box 10458

Kalispell, MT 59904

 

email: kat@thehousekat.com

www.thehousekat.com

 

406-270-3667 (MT)

 

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Rainmaker
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Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

Debbie - I was wondering if perhaps the person who provided some of the background info is a listing agent for foreclosures. I've represented buyers of foreclosures successfully as a buyer agent - and am really not sure what they were thinking.

Feb 20, 2016 09:39 PM #4
Rainmaker
2,387,125
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Kat. I buy a lot of properties to flip and know most of the listing agents and consider myself a pretty savvy buyer, but I will always be represented.

Great job with your post!

Feb 20, 2016 10:06 PM #5
Rainmaker
562,318
Women of Westchester Working Together
Women of Westchester Working Together - West Harrison, NY
Women helping Women get ahead

Yes' that is a shame.   I would think that a buyer's agent could be even more important under these circumstances.

Feb 20, 2016 10:18 PM #6
Rainmaker
804,790
Andrea Bedard
Thompson Company, REALTORS® 240.593.2860 - Silver Spring, MD
Fluent in German and Real Estate * M.A. ABR ASP

Kat, did you send a link to your blog post to the newspaper? If not, please do!

Feb 20, 2016 10:54 PM #7
Rainmaker
2,302,857
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Sounds like that other guy has adverstising issues that he better be careful with.

When it comes to knowing the business, Kat Palmiotti is the right Agent for the job every time!

Feb 21, 2016 12:56 AM #8
Rainmaker
1,728,054
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

Joe - I've represented buyers of foreclosed properties in the past. I just negotiated an accepted offer that was less than asking price and included a seller concession. 

Debbie - Yes, I agree. A buyer's agent is definitely more important during a foreclosure transaction because there are differences from a normal sale that weren't even mentioned in the article (contract comes at a different time in the process and is worded differently, timeframes are different, etc).

Andrea - Just did - thank you for the suggestion.

Patricia - Thank you ! You are too sweet.

Feb 21, 2016 03:14 AM #9
Rainmaker
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Wayne Zuhl
Remax First Realty II - Cranford, NJ
The Last Name You'll Ever Need in Real Estate

Hi Kat,

Great post.  In so many cases it is best for the buyer to have their own representation through a buyers agent.  I don't show any buyers any property unless they've got a pre-approval in writing.

Feb 21, 2016 09:28 AM #10
Rainmaker
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Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

Wayne/Jean Marie - Thank you for your comment. Pre-approval is the first thing in any buyer relationship - how else will we know what their price range is?

Feb 21, 2016 07:18 PM #11
Rainmaker
4,799,256
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Oh my, Kat.  I can't imagine anyone saying they should use the listing agent for a bank owned home.  In many cases, these are the folks that mass list homes without any knowledge of the home and often the community.  A sure recipe for unwanted and unpleasant surprises.

Feb 21, 2016 08:06 PM #12
Rainmaker
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Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

Gabe - Yes - I've only worked with one foreclosure listing agent who was helpful.

Feb 21, 2016 08:13 PM #13
Rainmaker
2,394,914
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi Kat - you should send a rebuttal to the newspaper.  They obviously have not done all of their research.

Feb 21, 2016 09:15 PM #14
Rainmaker
680,255
Nicole Doty - Gilbert Real Estate Expert
Zion Realty - Gilbert, AZ
Broker/Owner of Zion Realty ZionRealtyAZ.com

How did that article even get approved to be published? Sounds like a very ill-informed author. I wonder how many other real estate articles are written like that all over the place every week. 

Feb 21, 2016 11:01 PM #15
Rainmaker
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Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

Grant - Good idea.

Nicole - I'll bet there are quite a few!

Feb 22, 2016 12:03 AM #16
Rainmaker
2,192,392
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

So many of these PR fluff pieces are generated by "content writers" with no first-hand experience for the crap they throw out there.

Feb 23, 2016 02:36 AM #17
Rainmaker
2,192,392
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

And I should add, Bankrate doesn't care if it's true or not as long as it gets those coveted eyeballs.

Feb 23, 2016 02:37 AM #18
Rainmaker
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Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

Elizabeth -As long as newspapers, magazines, and the like continue to publish them, they'll keep on writing whatever they want. Ugh.

Feb 23, 2016 08:42 AM #19
Ambassador
3,008,495
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

Some things are regional.  I would say less than 5% of traditional listing agents ask for a pre-approval letter in my market.

Feb 24, 2016 01:15 PM #20
Rainmaker
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Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

Tammy - Yes, some things are regional, true.

Feb 24, 2016 07:18 PM #21
Rainmaker
99,811
David Artigliere
Reading, Pottstown, Norristown, Philadelphia - Collegeville, PA
ARTI Home Inspections, ASHI Certified Home Inspect

Hi Kat,

Wow, I hope buyers out there see your post.  I come across buyers all the time during home inspections that didn't get their own representation and they are often quite frustrated with the homebuying process and desperate for good, honest information.  Good post!

Feb 28, 2016 06:14 AM #22
Rainmaker
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Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

David - Thank you for your comment. It really is easier for a buyer to get to the closing table if they have help, and a great home inspector!

Feb 28, 2016 06:37 PM #23
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