REO Question

[ZCpops]

I am talking with a mortgage company's REO department about purchasing a property they recently foreclosed on, before it goes to their REO management firm. I would like to make them an offer, but first I have a few questions. I was hoping someone here may have answers.

1 - If sold through the company's REO department - I understand they will pay a real estate broker fee of 6%, in addition they also have another expense for the REO management firm - Any idea what this fee or percentage may be?

2- Is there a "rule of thumb" on offer's for REO property that are sold "as is" before any broker fees, management fees or repairs? For example is 75% of appraised value realistic?

*I will make an "as is" offer after inspecting the property to make sure it does not require major repairs. (Externally the property is in great shape)

[foenix]

By the date of your post, I'm sure the deal is done now. Is there any info you can give us on how it all worked out?

[ATL4U]

I am talking with a mortgage company's REO department about purchasing a property they recently foreclosed on, before it goes to their REO management firm. I would like to make them an offer, but first I have a few questions. I was hoping someone here may have answers.

1 - If sold through the company's REO department - I understand they will pay a real estate broker fee of 6%, in addition they also have another expense for the REO management firm - Any idea what this fee or percentage may be?

2- Is there a "rule of thumb" on offer's for REO property that are sold "as is" before any broker fees, management fees or repairs? For example is 75% of appraised value realistic?

*I will make an "as is" offer after inspecting the property to make sure it does not require major repairs. (Externally the property is in great shape)

I would still like to see the responses to "ZCpops" original questions. -Thanks!

[Memphis]

Most institutions follow the guidlines they have set in price structure. For example they may list at loan payoff + "x"% or they may list at a certain percentage of what the property was BPO'd at. And they do get several BPOs done before they list. They will also follow a ceratin price drop structure every 4-8 weeks.

[TampaREOman]

most REO depts will NOT sell to you no matter how much you offer. They have agents that they send everything through. If you want to get one without an agent, go to the courthouse auction.

rule of thumb is to find out what it is worth, and make an offer for that amount. Banks are not going to just give homes away for under market value. Would you?

[W. Peterson]

TampaREOman was absolutely correct. There is a protocol that most institutions have in place so that nothing gets missed (it works MOST of the time). If you're an institution with 50 or 50,000 REO's a year, you can't afford to deal with every single person that might be interested in buying your property. Remember they not only have to worry about getting the highest and best price, they have to have lawns cut, possible fines to research and pay, title issues, community safety and hazard issues, and a host of other things that could come back to bite them if they just up and sold the property to you.

One other thing, Payoff Amount has nothing to do with a bank or government agency's asking price. Asset managers that I know, rarely even look at the payoff amount, and if they do look at it, it's just out of curiosity. It's simply not a factor when you want to obtain the "Highest and Best Price in the Shortest Amount of Time" (Asset Manager's Goal)

This is from a former REO asset manager and REO listing agent.

Sorry I couldn't give you better news.

W. Peterson

webmaster for
Kissimmee Florida Real Estate
and a few others.

[larasi]

I also do REO properties and if you call the bank to make an offer they will just give you the agents name that they are dealing with. They will not accept the offer and if you write one ahead of the listing they will automatically counter the offer.

The reason they do not take the offers is because of all the reasons that the prior poster went over but also we get some of the properties as soon as they go the Auctions and we have to drive by and watch them once a week to see if they are Occupied or Vacant so the agent is involved from the beginning. The banks have to follow the procedures of redemption & eviction.

Sheri

[Homesurfer]

I was going to chime in, but TampaREOman said what I was going to say. Then W. Peterson said what I was going to say. Then Larasi said what I was going to say.

Once it hits the REO department, policy dictates what will happen. Things are fairly inflexible.

Side note: Fourth quarter (seven minutes to go) and San Diego is leading Indianapolis by two and San Diego has the ball after a punt (we'll ignore the bad non-call on pass interference. I don't guess you get to protest a flag that wasn't thrown).

[Dan Connolly]

Another one of these 2 year old threads being dredged up.............

[Homesurfer]

Damn. I hate when someone snookers me like that into answering an old thread. I never read the dates when I post. I just click on "new threads" and look for things that interest me.

New people should not be so anxious to generate post counts that they dredge up old threads. Irritating.