Copyright © 2008-2010

REO STICKING POINTS

 

 

 

                Sticking Point #1

                Not knowing which bank owns the property and which

                terms that bank will negotiable

                Buyer writes and submits an ‘Offer to Purchase’

               

                Buyer’s agent is skilled at negotiating the important terms of the contract:

—  Price

—  Costs associated with the loan

—  Title and escrow fees

—  Repairs

—  Compliance with city, county, state, and federal ordinances and laws

—  Time frames for closing the escrow and removing contingencies

 

        Sticking Point #2

                Not knowing how to read the bank’s contract - what is typical and atypical

                are difficult for a buyer or an untrained agent to understand

                Bank responds with a ‘Bank Counter Offer’ and a ‘Bank Addendum’

 

—  Buyer and the buyer’s agent carefully review the bank contract until the buyer

    understands his/her rights

            —  Buyer to have the proper verbiage in his/her contract to protect his/her rights

 

                Sticking Point #3

                Waiting and not knowing whether or not your contract is accepted 

                Buyer signs the bank’s contract and it goes back to the bank

 

—  The buyer may have only a verbal acceptance from the bank for several days.  It can take the

    bank all that time to return the signed contract to the buyer      

—  A difficult time for most buyers as things get very silent at this point.  Often, verbal

    negotiations are going on, but there is no signed paperwork available

            —  Your agent will make sure your offer keeps moving through the proper channels

 

                Sticking Point #4

                Not knowing how the channels work and where things can get bogged down. 

                REO sales operate differently than traditional sales

                Buyer’s agent works with the listing agent, the bank, and the asset manager to move things along

 

—  All negotiations with the bank are done through the bank’s representative called the

    asset manager.  The asset manager is the person between the bank and the seller’s agent.

—  Asset managers work for one bank and understand that banks position on what they will,

    and will not negotiate

 

Sticking Point #5

Not knowing the role of all the extra departments,

and the additional paperwork funneled through those departments 

                Buyer’s agent co-ordinates the escrow and closing date.  The best REO agents have at least 5 years                 experience with traditional sales before attempting REO sales.  

             

            The process may be slowed down by one or more of the following:

      —  The Deed of Trust and the Grant Deed to the Property not properly executed

      —  Bank overload – bank can’t keep up with the volume of foreclosures

—  Government laws initiated in the middle of your escrow that may cause delays

—  Banks haven’t cleared all the liens on the title to the property

—  Loan can’t be located because it’s been sold to another bank

      —  Loan rate locks expire due to delays

      —  Title companies located outside the Bay Area have special REO departments with different

          guidelines

      —  Distressed properties may need repairs before the lender will lend on the property

 

                Sticking Point #6

                Not knowing where things stand. 

                Buyer’s agent keeps your escrow on track

 

—         Skilled at knowing the questions to ask when communicating with the listing agent

—         Know when to be patient with the things we have no control over

—         Know when to be tenacious and push things along that we have control over