Posted: 8/11/2009 6:00:12 PM EDT
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I specialize in foreclosure, REO work. Seriously - that's what I do. I've negotiated to closing dozens of them in the past 2 years.
All the things you wanted to know about buying foreclosures but were too afraid to ask... hit me! Some information may be state-specific, but I'll help with what I can. |
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Do think the internet, virtual tour etc is gonna make you guys obsolete one day? No, I really don't. The problem is that most people have limited time and no expertise. Buying and selling a house is considerably more complicated than walking into wal-mart and buying a head of lettuce. A good RE Agent will guide your through the process and help you avoid potential pitfalls. Also, people generally do a shitty job of showing their own home, and have no idea how to get it ready for sale - staging and showing is an art form. Also, do you as a seller have the ability to show your house at the drop of a hat, on Tuesday afternoon? Do you really want people you don't know to traipse through your house without a person who has been through (at the very least) a background check, and whose livelihood depends on nothing bad happening to your house? That's the Agent's place - to show your house when you can't, to make sure that things go smoothly, and to keep the negotiations friendly and un-emotional (NOTHING worse than a buyer and seller talking face to face about an enormous, emotional investment.) |
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Not foreclose related, but if I wanted to sell a house to my cousin, what needs to be done to accomplish this the cheapest way for both sides? In Mississippi. Thx.. I don't know about MS, but in Ga the easiest way to do it would be to get a purchase and sale agreement, fill it out, sign it, and take it to a closing attorney to be processed and get the deeds recorded. If I were you, I'd probably call an agent and simply ask for a copy of the local Association of Realtors' purchase and sale agreement - if you have to, offer them a few bucks for a copy. |
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How long have you been in the biz? How did you get into REO/foreclosure work? My wife is a Realtor and is having a hard time getting banks/lenders to work with her. Any tips or advice? About 2.5 years as an agent. If you want to do listings, start with BPO work... and get ready to be raped at every turn once you get a listing. Typically, REO listing agents pay a lot of things out of pocket and then submit invoices to the banks, then wait 90 days for payment. I work buy-side, which is an art form all by itself... the hard part is getting the buyers lined up and ready to accept that the deal will be done on the bank's terms, or not at all. (A few years ago you could fanangle the banks into doing your bidding... not no more!) |
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Not foreclose related, but if I wanted to sell a house to my cousin, what needs to be done to accomplish this the cheapest way for both sides? In Mississippi. Thx.. I don't know about MS, but in Ga the easiest way to do it would be to get a purchase and sale agreement, fill it out, sign it, and take it to a closing attorney to be processed and get the deeds recorded. If I were you, I'd probably call an agent and simply ask for a copy of the local Association of Realtors' purchase and sale agreement - if you have to, offer them a few bucks for a copy. Cool. Thanks. Cousin has bucks and probably attorney on retainer. |
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Why's it so hard to find a realtor that will only show me houses that are not occupied?
Seeing pictures of the current occupants or their stuff scattered around the house made me immediately not consider a house as I did not want to be biased in my selection by their looks or the current furniture. Or even worse, when the kids are sitting on the couch playing video games while you're looking all over their place. Kharn |
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How long have you been in the biz? How did you get into REO/foreclosure work? My wife is a Realtor and is having a hard time getting banks/lenders to work with her. Any tips or advice? my wife is a realtor alos and things are gooooood.  Can't stand the new pres. but his first-time homebuyer package is allowing me to buy more ar's. Gotta love how that works mr. obammmmmma!
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Why's it so hard to find a realtor that will only show me houses that are not occupied? Seeing pictures of the current occupants or their stuff scattered around the house made me immediately not consider a house as I did not want to be biased in my selection by their looks or the current furniture. Or even worse, when the kids are sitting on the couch playing video games while you're looking all over their place. Kharn Couple reasons... If you're looking at foreclosures, Realtors often have the perception (and rightly so) that buying a foreclosure involves a shit-ton of paperwork and generally a pain in the ass on their end. It may also involve less commission (some foreclosures pay as little as 2%) Second, dummy realtors think that vacant houses are harder to sell because they're not all staged up and pretty - and this is generally true... most buyers have zero imagination and can only see what's there. Empty houses tend to creep people out a bit. (Case in point.. I have an investor I work with who actually tried selling a house un-staged and empty... no dice for awhile, despite showings. After staging the house up nice and pretty we started getting offers.) |
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I was looking at anything that did not have an occupant, mainly non-foreclosures at the time (I bought my place in 2005 which was still the strong upward growth of the real estate market here in MD, most foreclosures were in total ghettos where I knew I didnt want to live), but as an engineer, I measured every single room, etc, so I could AutoCAD everything out and be objective about what I wanted and compare floor plans (as I was looking for a non-garage house to build a 1-car garage and new master suite on after funds became available).
Kharn |
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I was looking at anything that did not have an occupant, mainly non-foreclosures at the time (I bought my place in 2005 which was still the strong upward growth of the real estate market here in MD, most foreclosures were in total ghettos where I knew I didnt want to live), but as an engineer, I measured every single room, etc, so I could AutoCAD everything out and be objective about what I wanted. Kharn Yeah... That doesn't exactly fit in the normal buyer box. I've got a very analytical education and background, and go about looking at houses the same way - objectively. Most people do not. I've seen buyers go into a "stupid buyer haze" over the weirdest crap - the smell of baking brownies, a nice table and chair setup in the kitchen. It's ridiculous what people will fixate on. |
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How many pennies have you found in your REOs this year?
Also , to the previous poster - I work heavily in REOs and have talked to asset managers of almost every large bank , unfortunately quite a few have stated to me they're 3-5 years out on taking new agents. |
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do you think you are better than a spineless used car salesman? Yes... On any given day, I need to know something about accounting, finance, economics, construction, and specific neighborhood... hell, even specific streets. My clients are generally in business for themselves - looking at property as a business commodity to be bought, rehab'd, then resold or rented. Either I add my knowledge, experience, and expertise or I don't have a job at the end of the day. Most of my business is repeat customers. Now, I have certainly met agents who are not better than spineless used car salesmen. They sickitate me and make me ashamed of my own profession... and are actually one of the worst parts of my profession - dealing with the idiot agents! |
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How many pennies have you found in your REOs this year? Also , to the previous poster - I work heavily in REOs and have talked to asset managers of almost every large bank , unfortunately quite a few have stated to me they're 3-5 years out on taking new agents. No pennies. I've found allllll kinds of other stuff in them, though. Most of it I wouldn't touch with YOUR ten foot pole. |
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So what /is/ involved in buying a foreclosure? I'm looking at houses now and the realtor I'm working with showed me a short sale property that I liked, but mentioned that it could take up to 6 months for the bank to buy off on the offer. Is that the same case as with REOs? Is there anything about a foreclosure that I should be looking for? Any pitfalls, etc? |
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How many pennies have you found in your REOs this year? Also , to the previous poster - I work heavily in REOs and have talked to asset managers of almost every large bank , unfortunately quite a few have stated to me they're 3-5 years out on taking new agents. No pennies. I've found allllll kinds of other stuff in them, though. Most of it I wouldn't touch with YOUR ten foot pole. What? Must be a northern thing, i've found something like $5 in pennies in all my REOs ........one of my most recent ones was a dog grooming place, complete with dead dog :-D |
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So what /is/ involved in buying a foreclosure? I'm looking at houses now and the realtor I'm working with showed me a short sale property that I liked, but mentioned that it could take up to 6 months for the bank to buy off on the offer. Is that the same case as with REOs? Is there anything about a foreclosure that I should be looking for? Any pitfalls, etc? Normally with REOs it's a pretty quick process, however once in a while you'll run into title hangups (Delays in county filings ,ect.) I had a short sale last year take 4 months to close , buyers had to move in with parents for a month and half to wait for the closing :( With REOs , make sure you get a inspection , too many people buy em thinking they know everything and run into major problems later. PS , maybe your trashouts don't have anything interesting, so far I've found ammo & a potato gun in mine :) |
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Not foreclose related, but if I wanted to sell a house to my cousin, what needs to be done to accomplish this the cheapest way for both sides? In Mississippi. Thx.. Walk into your closest Title/Abstract Co. and tell the girl at the front desk what you want to do. The Title Atty. will do the contract work for free if he has your closing business. |
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Quoted: Quoted: So what /is/ involved in buying a foreclosure? I'm looking at houses now and the realtor I'm working with showed me a short sale property that I liked, but mentioned that it could take up to 6 months for the bank to buy off on the offer. Is that the same case as with REOs? Is there anything about a foreclosure that I should be looking for? Any pitfalls, etc? Normally with REOs it's a pretty quick process, however once in a while you'll run into title hangups (Delays in county filings ,ect.) I had a short sale last year take 4 months to close , buyers had to move in with parents for a month and half to wait for the closing :( With REOs , make sure you get a inspection , too many people buy em thinking they know everything and run into major problems later. PS , maybe your trashouts don't have anything interesting, so far I've found ammo & a potato gun in mine :) Looking at listings that are foreclosures, there are mentions of corporate addendums and other Greek. WTF are those? |
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So what /is/ involved in buying a foreclosure? I'm looking at houses now and the realtor I'm working with showed me a short sale property that I liked, but mentioned that it could take up to 6 months for the bank to buy off on the offer. Is that the same case as with REOs? Is there anything about a foreclosure that I should be looking for? Any pitfalls, etc? With a short sale, the answer is yes - it could be months. If the house is also in bankruptcy, it could be never. I've seen people eat their own faces trying to get bankruptcy short sales to happen. The important thing to remember with a foreclosure is that you're buying as-is, where-is. The seller will not repair anything prior to closing. You need to make 100% sure that your financing is good to go (contingent upon appraisal, of course)... make sure that your lender has all your tax documents and that you're through desktop underwriting PRIOR TO MAKING THE OFFER. Around here, $1k earnest money is about right... or up to 10% for cash offers. In my neck of the woods, you can ask for about 7 days "Due Diligence" period - that's when you go in and make your inspections. During this time you can back out and get your earnest money back. Be prepared to sign a ton of documents saying that the bank isn't liable for anything at all. MAKE SURE that your lender is on the ball and that you don't go beyond the stated closing date on the purchase and sale agreement - banks will typically charge $100 per day for each day after the stated closing date due to buyer issues. I've had buyers just about get nicked because their lender's appraiser took 35 days (yes! 35! this was wells fargo, not so long ago) to get it done. (In other words, DOG YOUR LENDER EVERY DAY to make sure your file is getting moved along. Take names. Take numbers. Make it someone's PERSONAL PROBLEM if things aren't happening on the ball) Banks will typically want to close REO properties within 30 days of contract execution, or by the end of the month (So if you make an offer and it gets accepted on the 15th of june, they're gonna want to close by the end of July... but preferably by about 15 july) - this is why it's so essential that you have your side wired tight. To that extent, your agent needs to be on the ball too - addenda can come fast and furious from the seller's side, and they need to be signed and dealt with post haste - it is ESSENTIAL to keep the ball in the bank's court. Don't let the slowup be on your side... ever. |
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So what /is/ involved in buying a foreclosure? I'm looking at houses now and the realtor I'm working with showed me a short sale property that I liked, but mentioned that it could take up to 6 months for the bank to buy off on the offer. Is that the same case as with REOs? Is there anything about a foreclosure that I should be looking for? Any pitfalls, etc? Normally with REOs it's a pretty quick process, however once in a while you'll run into title hangups (Delays in county filings ,ect.) I had a short sale last year take 4 months to close , buyers had to move in with parents for a month and half to wait for the closing :( With REOs , make sure you get a inspection , too many people buy em thinking they know everything and run into major problems later. PS , maybe your trashouts don't have anything interesting, so far I've found ammo & a potato gun in mine :) Looking at listings that are foreclosures, there are mentions of corporate addendums and other Greek. WTF are those? Mostly hold harmless agreements so you can't sue the bank if your kid eats mold in the crawlspace.........Banks do not inspect properties outside of what agents report to them (and we just go off appearance and itemize our estimates). I've had literally every possible thing break on properties and REOs as well, and plenty of people get buyer's remorse once they purchase , so all the addendums,hold harmless and such are must-haves by the banks. Oh yeah, word of advice..........don't think you know everything about real estate and lowball the bank 30% off asking price, banks don't like that and agents don't either , 95% of properties sell within 5% of asking price ,so trying to use your 'expert' bargaining skills may actually costs you more in the end (I had one instance where the difference was $12k on a 80k house). |
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So what /is/ involved in buying a foreclosure? I'm looking at houses now and the realtor I'm working with showed me a short sale property that I liked, but mentioned that it could take up to 6 months for the bank to buy off on the offer. Is that the same case as with REOs? Is there anything about a foreclosure that I should be looking for? Any pitfalls, etc? Normally with REOs it's a pretty quick process, however once in a while you'll run into title hangups (Delays in county filings ,ect.) I had a short sale last year take 4 months to close , buyers had to move in with parents for a month and half to wait for the closing :( With REOs , make sure you get a inspection , too many people buy em thinking they know everything and run into major problems later. PS , maybe your trashouts don't have anything interesting, so far I've found ammo & a potato gun in mine :) Looking at listings that are foreclosures, there are mentions of corporate addendums and other Greek. WTF are those? They are longwinded documents written by lawyers saying that the house is as-is, where-is, and that the bank isn't liable for anything at all. Read them... or not. It really doesn't make a difference, as the bank simply won't play ball unless you sign each and every one of their damn addendum. |
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Ok, why is it that we (as a buyer) are not allowed to come with when you meet the seller to discuss offers? Is this because you are making back-door deals? In Georgia, it's a legal issue - represented sellers and represented buyers are not supposed to meet each other. You hired your agent to be your representative because they've got expertise that you don't. If you want to meet the seller personally, find a for sale by owner and go talk to the seller directly. If an agent is making back-door deals, they're probably acting illegally and if you catch them you can sue their broker out to high heaven. |
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Ok, why is it that we (as a buyer) are not allowed to come with when you meet the seller to discuss offers? Is this because you are making back-door deals? In Georgia, it's a legal issue - represented sellers and represented buyers are not supposed to meet each other. You hired your agent to be your representative because they've got expertise that you don't. If you want to meet the seller personally, find a for sale by owner and go talk to the seller directly. If an agent is making back-door deals, they're probably acting illegally and if you catch them you can sue their broker out to high heaven. It's illegal in Ohio UNLESS all parties consent to it, and then, I've been close to fist fights at closing, so jumping the gun on the contract is asking for it even more. If as a buyer , you want to know the mind of the seller of the home , ask the agent, we usually know the situation better than you do :) |
| Why the hell is it taking so long for the bank to accept/refuse my offer on the house I'm looking at buying. A little history....an Atlanta LEO owns this home, crashes his motorcycle on duty and is now in a veggie state. He is divorced, and obviously can't make the mortgage. Wachovia agrees to short sale it. It appraises for 180k. The bank is asking 150k. I offer 140k and they pay 7k in closing cost. I submitted this offer late June, what's taking so long. |
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Why the hell is it taking so long for the bank to accept/refuse my offer on the house I'm looking at buying. A little history....an Atlanta LEO owns this home, crashes his motorcycle on duty and is now in a veggie state. He is divorced, and obviously can't make the mortgage. Wachovia agrees to short sale it. It appraises for 180k. The bank is asking 150k. I offer 140k and they pay 7k in closing cost. I submitted this offer late June, what's taking so long. Wachovia is usually 60-90 days out in their loss mitigation department on acceptance/denial of short sales......Last survey I read said most guys at the bank have 200-300 properties in their portfolios for mitigation. |
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Is there even one real estate agent on the planet who can be trusted? That's almost as funny as: "Buyers are liars, and Sellers are tellers". No matter what side of the deal you're on remember...every time you open your mouth it will cost about $1K. That's a fact. |
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Why the hell is it taking so long for the bank to accept/refuse my offer on the house I'm looking at buying. A little history....an Atlanta LEO owns this home, crashes his motorcycle on duty and is now in a veggie state. He is divorced, and obviously can't make the mortgage. Wachovia agrees to short sale it. It appraises for 180k. The bank is asking 150k. I offer 140k and they pay 7k in closing cost. I submitted this offer late June, what's taking so long. Short sales take time. The short sale package typically involves a damn financial biopsy on the seller - about a 50 page package. This package, plus your offer, has to work its way through several levels of bank bureaucracy and get signed off on by several key individuals. If you're not working through an agent, you can maybe call the bank's loss mitigation/short sale department yourself and chase down the poor schleb who has the file. If you ARE working through an agent, I recommend that you call him/her every 45 minutes until they get pissed enough to either fire you or follow up with the listing agent, who may then follow up with the bank. (No, don't really call every 45 minutes... that's what I would do, but it's really not polite. Once a day would be fine. Be polite!) |
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Do you invest in real estate on top of your duties as an agent? If so, or even if not but you would have some sound advice to give on the matter:
1) How would you recommend someone looking to begin real estate investment should begin? 2) How valuable is an agent in this? Would an agent alone be sufficient, or should one also consult lawyers, tax advisors, mortgage brokers, etc.? Thanks! _MaH Posted Via AR15.Com Mobile |
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How much time are you seeing between NOD and forclosure being executed by banks(average)? Are you seeing a lot of people camping out in houses but the banks delaying forclosure? NOD/foreclosure depends on state, NOD to foreclosure filing in my area is 150-180 days after NOD then about another 3-4 months after the successful auction. I don't see alot of people occupy the properties after the foreclosure. |
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Why the hell is it taking so long for the bank to accept/refuse my offer on the house I'm looking at buying. A little history....an Atlanta LEO owns this home, crashes his motorcycle on duty and is now in a veggie state. He is divorced, and obviously can't make the mortgage. Wachovia agrees to short sale it. It appraises for 180k. The bank is asking 150k. I offer 140k and they pay 7k in closing cost. I submitted this offer late June, what's taking so long. Short sales take time. The short sale package typically involves a damn financial biopsy on the seller - about a 50 page package. This package, plus your offer, has to work its way through several levels of bank bureaucracy and get signed off on by several key individuals. If you're not working through an agent, you can maybe call the bank's loss mitigation/short sale department yourself and chase down the poor schleb who has the file. If you ARE working through an agent, I recommend that you call him/her every 45 minutes until they get pissed enough to either fire you or follow up with the listing agent, who may then follow up with the bank. (No, don't really call every 45 minutes... that's what I would do, but it's really not polite. Once a day would be fine. Be polite!) The agent I'm working with did say that someone from Wachovia called him last week to get more information on the seller. Is this a good thing? |
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Do you invest in real estate on top of your duties as an agent? If so, or even if not but you would have some sound advice to give on the matter: 1) How would you recommend someone looking to begin real estate investment should begin? 2) How valuable is an agent in this? Would an agent alone be sufficient, or should one also consult lawyers, tax advisors, mortgage brokers, etc.? Thanks! _MaH Posted Via AR15.Com Mobile I am actively buying properties , being an agent helps and hurts at times while investing (But overall , the knowledge you get by working with banks outweighs the issues that arise with being an agent). 1. I'd learn to analyze a deal , learn what repairs are needed, what requires permits ,ect. Biggerpockets.com is great for learning about investments. 2. A agent should have access/knowledge of what's out there, many times with investing you may look at 10 properties, bid on 8 and get a accepted bid once every 20 homes , you can pick and choose what you want in this market. |
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Do you invest in real estate on top of your duties as an agent? If so, or even if not but you would have some sound advice to give on the matter: 1) How would you recommend someone looking to begin real estate investment should begin? 2) How valuable is an agent in this? Would an agent alone be sufficient, or should one also consult lawyers, tax advisors, mortgage brokers, etc.? Thanks! _MaH Posted Via AR15.Com Mobile This is tricky. I do not personally take possession of any houses, nor do I own stock in a corporation that does so. HOWEVER, I work closely enough with a few key investors that my yearly income is essentially made or broken by real estate investments that I have a say and hand in every step of the way - from selection, to rehab, to sale. This is the primary bulk of what I do. It is NOT an easy job. 1) Find a pot of money. I mean it. Conventional financing is virtually out of the question, and hard money loans are ridiculously expensive... if you can find a hard money lender - most are out of business. I recommend hitting up friends and rich family members. Be sure that they won't kill you if you lose their life savings. 2) Invaluable. Many of your best deals are going to be REO properties, and hands-down the best way to find them is to get with a competent agent. One of the best ways to find agents is to find your local real estate investor group. What I was saying before about me having to know something about finance, accounting, economics, blah blah blah? It's not hyperbole. Houses are the most complicated consumer-level product you will ever deal with. You MUST have a technical knowledge of the product. If you don't know how houses are put together, partner up with someone who does. If you don't know what a T-account is or how to determine time value of money and cash flow, start taking classes at a local community college in basic accounting and finance. |
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How much time are you seeing between NOD and forclosure being executed by banks(average)? Are you seeing a lot of people camping out in houses but the banks delaying forclosure? This is very state-specific. In Georgia, this process can legally be lightning quick. We're a title, non-judicial state. Really, an eviction could be done in about 30 days. The property also has to be advertised for auction for 4 weeks in the local organ. Realistically, it takes awhile... I've seen houses sit for months and months before the bank finally got around to the eviction and foreclosure. |
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Why the hell is it taking so long for the bank to accept/refuse my offer on the house I'm looking at buying. A little history....an Atlanta LEO owns this home, crashes his motorcycle on duty and is now in a veggie state. He is divorced, and obviously can't make the mortgage. Wachovia agrees to short sale it. It appraises for 180k. The bank is asking 150k. I offer 140k and they pay 7k in closing cost. I submitted this offer late June, what's taking so long. Short sales take time. The short sale package typically involves a damn financial biopsy on the seller - about a 50 page package. This package, plus your offer, has to work its way through several levels of bank bureaucracy and get signed off on by several key individuals. If you're not working through an agent, you can maybe call the bank's loss mitigation/short sale department yourself and chase down the poor schleb who has the file. If you ARE working through an agent, I recommend that you call him/her every 45 minutes until they get pissed enough to either fire you or follow up with the listing agent, who may then follow up with the bank. (No, don't really call every 45 minutes... that's what I would do, but it's really not polite. Once a day would be fine. Be polite!) The agent I'm working with did say that someone from Wachovia called him last week to get more information on the seller. Is this a good thing? Well... maybe. It could mean that the bank is finally processing the file. Or it could mean that the initial package was incomplete and they're going back and fixing it (Which means the seller's agent was somewhat incompetent) I'd take it as a good omen. |
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Do you invest in real estate on top of your duties as an agent? If so, or even if not but you would have some sound advice to give on the matter: 1) How would you recommend someone looking to begin real estate investment should begin? 2) How valuable is an agent in this? Would an agent alone be sufficient, or should one also consult lawyers, tax advisors, mortgage brokers, etc.? Thanks! _MaH Posted Via AR15.Com Mobile 1) Don't EVER take advice from someone about business unless he has made or lost $1M in that business. 2) Some are worth more than their weight in gold and will make you vulgar amounts of $$. Others aren't worth the stain that ran down the crack of their Mama's ass. |
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Are you aware of what the Case Shiller index is, have you seen it lately, along with it's projections through 2013, and what are you thoughts?
I'm not too interested in national trends, actually... I probably should be, but it doesn't effect my day to day business. I see what the market is doing in the specific neighborhoods (and even specific streets) that I farm, and that is what keeps the bread on my table. |
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Why are commissions so high for a normal agent? I mean 6% on a 150k house? 9k to the agent? That is pretty crazy money if you are moving a bunch of houses. Whoah there, sparky. Let's back that gravy train up. The commission typically gets split between the listing agent and the selling agent... Normally, that means you get 3%. For me, I have to pay my broker 10% of my commission. Then I pay a $30 accounting fee. Then I pay 0.0012 of the total sale price to the local FMLS board. So, 150000 * 0.03 is 4500... times .9 is 4050... minus my $30 fee is 4020... minus 0.0012 is 3840. Yeah. Not so rosy anymore. |