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Bank Owned vs. Private Party

By
Real Estate Agent with Knipe Realty NW

I have to wonder where the belief began that the only great deal in Real Estate is a bank owned property.  Granted, the bank does not want homes sitting on their books endlessly, however, they are not so desperate that they are going to sell it for pennies on the dollar.  I often find that typically one of the first questions a new buyer will ask me is: "do you have any bank owned properties?"  Do you know how I answer?  "Why is that important to you?"

Interestingly, as I drive around previewing homes and showing clients I am seeing much better pricing in the private sector.  I realize that the media purports the numerous people who are upside-down in their homes, many of which are handing their homes over to the bank.  However, there are just as many people who simply want to move.  They have lived in their homes for several years, have equity and have priced their homes to compete well on the market.  As I see it, these are much better deals than arguing with a bank who is trying to minimize their losses.  The other interesting point in this is that the sellers of homes with equity tend to be much more realistic with negotiations and show more willingness to make repairs if necessary.

The way I see it, with a high inventory of homes there are plenty of ready, willing and able sellers available that are much more negotiable than banks!

Jean Terry
Keller Williams Realty Spartanburg, S.C. - Spartanburg, SC

Hi and welome to Active Rain, a great site to network, share, learn and have fun. Good Luck

Oct 09, 2008 07:31 AM
Suzanne Champion
N.J. Realty - Westerville Ohio - Columbus, OH

Regular sellers will also provide repairs and other things more readily than banks, and chances are, these properties are also in better condition.

Know what else...NEW homes are also a great deal right now, they are competing as well.  You may want to include those in your buyer's tour of homes.

Oct 10, 2008 01:08 AM
Jim Crawford
Long & Foster - Fredericksburg, VA
Jim Crawford Broker Associate Fredericksburg VA

I would always buy the private owned as opposed to bank owned.  After this weeks market, expect to see some major price reductions from motivated sellers.  The bottom of the market is just around the corner. 

Oct 10, 2008 01:41 AM
Jim Crawford
Long & Foster - Fredericksburg, VA
Jim Crawford Broker Associate Fredericksburg VA

I would always buy the private owned as opposed to bank owned.  After this weeks market, expect to see some major price reductions from motivated sellers.  The bottom of the market is just around the corner. 

Oct 10, 2008 01:41 AM
Patty Luther
RE/MAX Rock-n-Roll Realty - Lewiston, ID
Lewiston ID Real Estate, Idaho-Washington

I handle many REO's in my area and Asset managers often handle pre-foreclosure valuations and inspections for the lender.  After a foreclosure is completed, they will coordinate with a local real estate agent to get the property listed and sold.

I have worked with several foreclosures and many of the asset managers below and I know the ones I like to work with and the ones I dread working with, some I won't even take the listing anymore...with the asset managers getting part of OUR listing commission...one of the companies asking for 47% of the listing commission...  When they hire us as Realtors then the Asset manager expects us to put all utilities in our name, pay all Bills, old bills included...and then you have to put in for reimbursement ... sometimes it takes months to get reimbursed...if reimbursements are not submitted right, you won't get reimbursed at all...  (gees I hate paying my OWN bills, it is really NO FUN paying bills for these foreclosures, and to top it off, there is NO compensation for the extra work, and BELIEVE me it is a lot of EXTRA WORK  :-( one good thing of it is ...I also sell several of the REO's I list /manage)  I have recently heard of a software that will help me manage the REO's and the billings...I have yet to check it out...but when I get a moment I will!

Another good thing is the Lenders usually price the properties at Fair Market Value...and they are motivated sellers.. realistic to the market, and able to adjust to the current ever-changing market.

I have also been working with several LENDERS on helping with Short Sales...(Wells Fargo is good to work with) and the process is sometimes quite simple to put a halt on the Foreclosure...and that is having the Homeowners fill out information on their LACK of ability to pay back the loan, they fill out forms to the BANK, the Bank then reviews the financial information to decide if it is a true hardship, if it is approved, the foreclosures is put on HOLD, the bank then gives the Realtor time to get an offer on the home, at Fair Market Value...(they don't necessarily tell you what they think Fair Market Value is ~ but you are the professional ~ YOU know) so when the offer is MADE, it is of course conditioned/contingent on Acceptance by the BANK of the Short sale... it is all FAXED to the Lender for them to decide if it is what they want, they most likely counter it back, then you get it back to the offeror...they may or may NOT, make a higher offer...but when they do make the offer back, it is the Offerors HIGHEST & BEST Offer...then YOU HAVE the SELLER sign the complete accepted offer, contingent on Acceptance by the BANK of the Short sale...and it all goes back to the BANK... then you wait... most of the lenders I have been working with will have an answer back within 2 weeks...  then you PROCEED to closing...

It sounds hard, but these banks don't want these properties back, they will usually work with US Realtors and the sellers....BUT you must remember to let the sellers know, they most likely will get a 1099 at the end of the year from these LENDERS...it is what they call phantom income... what they grace the original borrower with on the short sale, to what the original borrower owed... is considered INCOME....so be prepared; it may or may not happen...but it needs to be told to these short sale sellers...

There is NO rhythm or Reason to what happens with these foreclosures & short-sales ...  But they will keep you busy and they are definitely going to be part of your market ... so if you feel like handling some of them check out the links below to get yourself set up to HELP...Good Luck!

 Patty's Business Card

Asset Manager Lists

Asset managers often handle pre-foreclosure valuations and inspections for the lender.  After a foreclosure is completed, they will coordinate with a local real estate agent to get the property listed and sold.

HMB INC.
HMB manages and markets HUD properties in Alaska, Idaho, Illinois, Indiana, North Carolina, Oregon, South Carolina, Virginia, Washington and West Virginia

HORIZON MANAGEMENT SERVICES
National database of homes for sale, select by state. Not all states have listings, you just have to check the sates you are interested in.

INTEGRATED ASSET SERVICES
Property in Alabama, Arkansas, Colorado, Delaware, Florida, Georgia, Iowa, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Massachusetts, Maryland, Michigan, Minnesota, Missouri
They've also gone to a drop-down list of all the states, then you have to select by city.

KEYSTONE ASSET MANAGEMENT
Real Estate for sale in Alabama, Georgia, New York, Ohio, Pennsylvania. Other states are also available, just search for the state you'd like. Pick the state, city, or zip code, then click the "Find A Home" button.

LENDERS ASSET MANAGEMENT CORP.
Various states with houses for sale, search for the ones that interest you. Thankfully, they only list states where they have property instead of the whole US. Select the state, then click "Find".

LPS ASSET MANAGEMENT
National list with foreclosures in all the states checked.
Contributed by Rae

REO SOURCE
Nationwide  - Search by state or zip code
A full United States drop down list, but most states did have property listed

PREMIERE ASSET SERVICES
This is Wells Fargo asset manager.
There's a "Property Search" link on the left side of the page.  They have a CAPTCHA to access the property listings that is very sensitive.  Letter case is important.

SECURITY NATIONAL FORECLOSURE LISTINGS
They state there are over 1000 properties nationwide

Bank Owned - Foreclosed Homes

The following links contain property owned by that institution. Most lenders do not restrict their loans to a local geographic area, so you'll find most of the properties spread out throughout at least several states.

AMERICA TAX FUNDING
Not really a bank, they have tax certificate foreclosed property 

NATIONAL BANK OF ARIZONA HOMES FOR SALE
Property owned by National Bank of Arizona

BANK OF AMERICA FORECLOSURES
One of the largest lenders in the US, you can search for residential or commercial.   They do list how many properties are in each state, making the search easier.

BEAL BANK FORECLOSURE LISTINGS
Beal Commercial Properties - Haven't seen a whole lot of commercial property listed, but they always seem to have at least 10 or so.

BRANCH BANKING & TRUST
Searchable List of States

CAROLINA FIRST
Bank owned property in North Carolina, South Carolina and Florida

CHASE OWNED PROPERTIES
Select Chase homes by state

CITIMORTGAGE - CITIBANK OWNED PROPERTIES
Searchable by state and property type

COMPASS BANK HOMES FOR SALE
Foreclosed property listed mostly in Alabama and Texas, some New Mexico and Colorado

COUNTRYWIDE FORECLOSURES
The largest independent home loan originator, now owned by Bank of America, they have listings throughout the United States.

DOWNEY SAVINGS & LOAN
Downey Savings is regional, based in Southern California, but they now have listings in various states throughout the US, most property is still in California

FIFTH THIRD BANK
Michigan and Florida have the most properties.

FIRST FEDERAL BANK OF CALIFORNIA
You can probably guess it's California foreclosed homes.

FIRST NATIONAL BANK OF ALASKA
Alaska properties - not a whole lot

CAPMARK - PREVIOUSLY WAS GMAC COMMERCIAL MORTGAGE
Commercial properties throughout the U.S.

GRP FINANCIAL SERVICES
They have a nice feature where states with property are colored blue, and the number of properties listed in that state appears on the map.

HOME LOAN BANK
Wisconsin, Michigan, Pennsylvania, New York, Maine, Texas

HSBC HOMES FOR SALE
Search HSBC foreclosures by state

HSBC COMMERCIAL
Did not see a whole lot of properties available

INDYMAC FORECLOSURES
Many states listed, they also have a lot of manufactured housing listed.

LEXINGTON STATE BANK
Small list of NC properties, scroll down and click "I accept"

MANUFACTURERS & TRADERS TRUST
Not huge amounts of property available

NEW SOUTH FEDERAL BANK
Alabama, Louisiana and Tennessee foreclosure listings

OCWEN
Large buyer/servicer of non-performing loans.

PEOPLES BANK
Predominately homes in Connecticut

REGIONS BANK
Southeastern US - Contributed by Millicent

TAYLOR BEAN REO
Taylor Bean REO is a division of Taylor, Bean & Whitaker Mortgage Corp. that specializes in the listing, sale and management of lender-owned properties throughout the United States.  Emphasis in Georgia and Alabama, but they do have national listings.

UNITY BANK
New Jersey properties

VIRGINIA HOUSING DEVELOPMENT
Foreclosed homes in Virginia

VIRTUALBANK HOMES FOR SALE
A few homes for sale sprinkled around the country.

WASHINGTON MUTUAL
Washington Mutual was the largest Savings and Loan in the United States, now owned by J.P. Morgan

WELLS FARGO COMMERCIAL
Commercial only, if you want Wells Fargo residential, use the Premier Asset Services link in the Asset Managers section.

ZIONS BANK
Properties in Utah, Idaho, Colorado, Illinois

Smaller Regional Bank Foreclosures

FRANKLIN SAVINGS
Small list of properties around Cincinnati, OH

ISABELLA BANK
Foreclosed properties around Harrison, Michigan

SUNFIRST BANK
Cedar City and St. George, Utah

FIRST FEDERAL
South Carolina - They also list mobile homes

You can also find additional listings from our other pages:
Realtor Listed Property
or:
National Foreclosure Data Provider

 

Oct 12, 2008 08:12 PM
Laurie Logan
Keller Williams Realty, Inc., Broker Associate - Madison, WI
South Central WI Real Estate

Hi Angela,

I don't see much 'rhyme or reason' to finding the 'best deals.'  We just need to know our markets.

Oct 13, 2008 12:15 PM
Angela Pernisco
Knipe Realty NW - West Linn, OR

You are correct in that we need to know our markets inside and out in order to be valuable resources to our clientele.  However, we are also in a market where investors are prevalent and what they are looking for is the 'biggest bang for the buck' so we also need to be savvy to where they can acomplish this.  We must be able to educate the novice investors so that they understand that the "old school rules" do not necessarily apply as they used to.  I have worked with many clients who want to enter the realm of investing and are stuck on the old rules. 

Oct 13, 2008 03:31 PM