Viewing Vacant Bank-Owned Homes-Short List of 5 Viewing Surprises

By
Real Estate Agent with Casa Latino Four Corners, REALTOR, CDPE

Today, a Buyer and I were viewing homes and most of them were bank-owned and vacant.  Bank-owned (R.E.O.-Real Estate Owned) properties are fine and sometimes they're even exceptional deals.  But you really never know what you're going to get, though, when you finally get there to take a look

1.  Getting the Property on "The List" of Homes to be Shown to a Buyer.  This can be the easiest or the hardest thing to accomplish.  First, the home must be priced very well for Buyers to take notice of it, especially with the large number of bank-owned properties for sale in our Central Florida area.   

2.  When the Buyer Wants to View the Property, the Buyer's agent needs to get showing instructions.  Thank goodness for the "ShowingDesk" button on our MLS.  All we have to do is click that button and the showing instructions miraculously appear--unless the listing agent hasn't recorded any instructions, which happens very often.  Sometimes, those instructions are incorrect or are outdated.  If the ShowingDesk button isn't activated, then we have the option of calling the listing company or agent.  When viewing one property recently, I had gotten the showing instructions from the ShowingDesk button (it was a combination lockbox code) but the code given was not opening the lock.  I called the agent and he said he had so many listings he couldn't possibly remember the code for the house I was at and I was to call the listing office for the code.  Well, it was after hours and there was no one at the office to receive my call.  I had to call the agent back and nicely try to finagle any kind of help.  We finally resolved it and got into the house about three different combination codes later. 

3.  Buyers Want to See Lots of Pictures of the Home.  And many (although not all) REO listing agents take the required Front Exterior picture of the home and may not take other pictures of the interior of the property.  Some REO listing agents do an awesome job and have plenty of pictures and even take pictures of issues with the home such as a roof leak/moisture issue, mold issue, or whatever.  With our Mid-Florida Multiple Listing Service (MLS), we are allowed up to ten pictures of the home.  Buyers--ALL BUYERS--want to see pictures of the home, both exterior and interior.   A Buyer wants to see pictures of the front of the home, the kitchen, the living area/living room, the master bedroom and master bathroom, the other bathroom, the backyard, any interesting features about the property, and any/everything else about the property that can be photographed.  Buyers use pictures of the property to make decisions on whether or not to view the property. 

4.  The First Impression and Door Prizes at the Home are Anyone's Guess.  Once it's been decided to go and see a bank-owned home, then comes the fun!  Often, the pictures of the home seen on the MLS may not be a true picture of how the home looks when you go see it.  Imagine that you and the Buyer drive up to the house, and the grass may or may not have been recently cut.  It will have that look that only vacant homes can have.  Often, there are door hangars on the front door or jammed in between the screen door and its frame promoting the local pizza place or other services such as coupons from house-cleaning agencies, etc.  Today, I was surprised to find a door hangar from the water company on one home that indicated the water company had fixed a pipe leak at the property.  The paper hangar looked like it had been there for some time, as it was very weathered.  This freaked the Buyer out, though, and she looked through the house for evidence of a plumbing leak.  The most interesting door prize I have found in my years as an agent was one from Animal Control saying that the owners of the property had 24 hours to contact them about a possible abandoned dog on the property or face fines. 

5.  The Owners of the House Before the Bank got the House may have Roughed Up the Property a little--or a LOT.  No matter what is written in the public marketing remarks for the house (if anything), what the listing agent has written about some properties cannot prepare you for what you encounter AT the property.  For instance, some REO properties are very well-maintained and have all the appliances and light fixtures, and the HVAC unit(s) while others do not.  Depending on when the listing agent or the bank's servicing company was last out to the home, the grass may or may not be cut and the property may or may not be secure.  Secure in this case means that the front door is locked and there is no other way of entry to the property--broken window, side door in the garage is locked.  Today, we entered a property that appeared fine upon entering, then noticed someone had thrown something through a bathroom window, possibly to just vandalize it or maybe to gain entrance.  Thankfully, there was not anyone inside the home to greet us unexpectedly--but that kind of thing DOES happen with vacant houses.   

I'm sure I'll post again about vacant houses again soon.  Looks like they are here to stay for a while.  I still view that fact as a good thing because there are a lot of opportunities available.  Are you still interested in seeing vacant REO properties?  What procedures do you use when viewing vacant REO properties to stay safe while still making a profit? 

These views are my own views.  I may or may not be correct in my views and opinions. 

 

 

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Rainer
49,392
Lee Cunningham
Cunningham Team RE/MAX R.P. - Greenville, SC
Greenville SC Real Estate

Yes, shopping for these home is where the rubber meets the road.  Since it's AS IS, you better be ready to check values and what it will take to bring the property up to speee.  Good deals can be had though.

Oct 17, 2008 11:07 PM #1
Rainer
54,702
Keith Manson
First Weber Group/short sale/cdpe/gri - Muskego, WI

There are a lot of good deals but like anything you have to be willing to look hard for the good ones. Those that look hard will find good investments for the clients or themselves.

Oct 17, 2008 11:20 PM #2
Ambassador
510,489
Pam Dent
Gayle Harvey Real Estate, Inc. - Charlottesville, VA
REALTOR® - Charlottesville Virginia Homes / Horse

I have been in several of these listings that are so trashed and filthy that you feel like you would want to step right into a shower after you exit the premises, clothes and all.

Oct 17, 2008 11:25 PM #3
Rainmaker
250,723
Angela Lawrence
Noble Merit Real Estate Services - Winston-Salem, NC
Broker/Owner

We have a couple of investors that buys these type of homes, of course to rent out, our investors are not intimitated and somehow they make it work.  They have alot of determination and will power.

Oct 17, 2008 11:35 PM #4
Rainer
68,711
Lisa Spalding
Casa Latino Four Corners, REALTOR, CDPE - Longwood, FL
REALTOR, CDPE

Lee-  Couldn't agree with you more.  And, yes, GREAT deals can be had.  Some of the banks are having a quicker turn-around with responses, too.  I've submitted offers to the listing agent in which we had a bank counter within a few hours (and in WRITING, too!).  I'm not sure that I could have that quick of a response from some of my regular Sellers.  :)

Keith-  Yes, there ARE good deals out there.  Kind of like the needle in the haystack but worth it, for the right Buyer. 

Pam-  I know what you mean!  We had lunch in the middle of the showings and I felt like I had to wash my hands really, really well before I put them anywhere near food.  My least favorite are the homes where there is a moisture issue (I extremely dislike the headache that I get after inhaling the mold/smell in those homes) or where the dog/cat weren't housetrained. 

Brad and Angela-  I do enjoy working with investors on these deals.  They know value and they can see past all the "ick" and can envision what the home would look like with a little elbow grease.  Plus, an investor also knows you can't get something for nothing and, while they will look carefully at a bank addendum that says they will have to pay $50 or $100 per day should the house not sell by the closing date, they understand the necessity of it.  Other Buyers won't necessarily understand the banks wants and requirements in their paperwork. 

Oct 18, 2008 12:14 AM #5
Rainer
33,785
Rose Robinson
Coldwell Banker Wright Realty - Conway, NH

Hi Lisa,

Very good post; it's been awhile since I have either shown or bought a bank-owned...thank God we don't have a lot of these where i live.  Anyway, I will was wondering if these REO's are really such a good deal?????

Oct 18, 2008 12:55 AM #6
Rainer
68,711
Lisa Spalding
Casa Latino Four Corners, REALTOR, CDPE - Longwood, FL
REALTOR, CDPE

Rose-  Thanks for the comment.  Yes, a lot of the REOs ARE really good deals--but not all of them, of course.  And, you have to jump through the banks' hoops as a Buyer, addendum-wise. 

Oct 18, 2008 07:45 AM #7
Rainmaker
1,014,121
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

One thing that annoys me about showing some of these bank owned listings is when they are in a gated neighborhood.  The listing agent never has the gate code.  So you have to sit outside the gate and wait for some other car to show up and open it for you. 

We just took over a bank-owned listing that has bats in the attic.  The animal control came out and ended up flushing out nearly 50 bats.  Pretty wild.

Oct 18, 2008 11:56 AM #8
Rainer
68,711
Lisa Spalding
Casa Latino Four Corners, REALTOR, CDPE - Longwood, FL
REALTOR, CDPE

Rob-  That's TOO true!  Another Buyer and I were viewing REO condos last weekend and NONE of the listing agents had the gate code for condos in Southern Pines.  Technically, you're supposed to call the management company for entrance there but they don't work on weekends.  So, we had to wait for someone going through the gate and get in behind them.  So, so frustrating.  You would hope that the listing agent would actually talk to someone at the condo association to get the code so that they can get a non-paying-COA-fee paying owner out and someone IN the property to buy it that will be paying.  You would think that they would try to make showing and selling the property as easy as possible, but I guess not.  :) 

Oct 19, 2008 12:49 AM #9
Rainmaker
2,189,295
Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Hi Lisa: Most of the agents in Sacramento shoot only a front photo of the home. Part of the reason is even if they don't shoot one or two photos of the interior, the electricity is most likely turned off so the photos are too dark. It's also a lot of work to fill out the property profile sheets, so I think REO agents aren't always as careful as they could be.

For example, there was a great home in Midtown that was advertised as a 3/1 with no interior shots. Turned out it was a magnificent historical structure with two ceramic baths and a kitchen with granite counters. I know that because I happened to tour it. But agents who were looking for suitable REOs for their buyers passed it up. It sat on the market for more than 30 days without an offer because of those listing mistakes.

elizabeth weintraub sacramento real estate agent in land park

Oct 19, 2008 05:14 AM #10
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Lisa Spalding

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