If We Hire A Real Estate Agent, Can They Work With Us On Foreclosed Properties?
Friday, January 22nd, 2010 at
6:37 pm
Can most real estate agents help their clients with foreclosed properties, or do they usually just stick to listings with home owners? We’re looking into buying, but are on a limited budget, and want to look more closely into foreclosures. Thanks.
Tagged with: Agent • Estate • Foreclosed • Hire • Properties • Real • They • With • Work
Filed under: Q & A
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Yes, a real estate agent can work with you on foreclosed properties. The important thing is to interview agents and make sure they have the knowledge and skills necessary to help you achieve your objectives.
Most states have provisions for buyers to have their own agent (a buyer agent). But not all agents are created equal. Some are more experienced than others.
There are a number of ways that agents can help a buyer with properties that are not listed in the Multiple Listing Service.
HUD properties (http://www.HUD.gov) are foreclosed properties that have been insured by the federal government (i.e. FHA and VA loans, etc.). In order to make a bid on these properties, you must do so with the help of a real estate agent whose company is registered with HUD. Ask the agents you are interviewing if their company is registered and if they have ever helped a buyer purchased a HUD home. You can also see what homes are available at the website above.
Get a list of foreclosures from the county where you live. Ask about the procedure to make a bid on a particular property. Normally you need to already have been approved by a lender, so you have the money ready within a short period of time.
Ask potential agents if they have ever helped a buyer purchase a foreclosure. Also ask if they have experience with “short sales” (pre-foreclosures).
You may have to interview a lot of agents to find one who can help you, but you can probably search on the internet to find one. You could do a google search something like “town real estate, foreclosures, buyer agent” to cover all of the bases.
In general, I recommend that buyers find a good buyer agent by selecting someone who has a CRS and ABR designation. CRS means Certified Residential Specialist and ABR means Accredited Buyer Representative. CRS is the “cadillac” of designations and means that the agent has significant experience as well as has taken the time (and money) to take additional training courses. ABR courses focus on helping buyers. However, neither of these designations assure that an agent has experience with foreclosures. They just mean that the agent is conscientious about improving their skills so as to better help their clients. You would still have to interview them carefully.
There are currently a lot of foreclosures in the Multiple Listing Service (at least in my area and probably in yours). These are usually described as “corporate owned” properties. Also short sales, whereby the property will be sold for less than the owner owes on the property. And the way you buy these is the same as purchasing a home in the normal manner. The difference is that the lender must give approval for the offer (in the latter case) and that the lender is the owner (in the former case).
In any case, just because a property is a short sale or a foreclosure doesn’t mean it’s a “good deal.” A good buyer agent will do a market analysis on the home you wish to purchase to assure that you don’t pay too much for the property. In recent years, many buyers had “zero down” loans and purchased their homes at the peak prices of the market. Now, in many parts of the country, values have declined so that the home may be worth much less. That’s where “short sales” come in.
Hope this helps.
What you mentioned are known as REOs (Real Estate Owned – by Lenders) after properties were foreclosed. Yes, you will need to use a RE agent as the properties are normally listed on MLS.
However, there are a couple of other ways you can do what you want and may be more effective and efficient.
You are better served using someone that specializes in short sales. RE agents are limited to the customary commissions and procedures, while someone that works on short sales (offering to lenders to buy BEFORE the property becomes a REO), may be better suited to help you achieve what you want – offer, in fact this person can submit the offer for you as a third party, and suggest to you strategies to use – based on his/her experience with lenders – perhaps with the lender that has the mortgage on the property you are interested in, and may charge a flat fee or “share” in the discount or profit. If you cannot find someone call or email me. Our last short sale took 3 months but we got a better than 47% discount off the “current market price” of the property.
Carlos V
Yes, they can. However, keep in mind many foreclosures have been “trashed” either by tenants or the previous owners. One even threatened to put cement down the sewer pipes–and who would have even thought to look for that?
As you’re trying to conserve your money, your best bet is actually pre-foreclosures. Although some REOs (bank-owned) properties are listed, pre-foreclosures are not (unless an agent pursues them or the owner decides to sell to get out of the problem).
You need to find someone willing to access (or pay to access) the data and then approach people who are in financial trouble but not yet in foreclosure–and that takes a certain finesse. Many are in financial pain and every phone call or doorbell is another creditor, so they are often unresponsive.
A skilled Accredited Buyer Representative (ABR) who specializes in foreclosures is likely your best match.
All REO’s are listed anymore and in the MLS systems. Days of the “secret lists” are gone & there’s no getting a head start on that unless your agent happens to have an REO connection.
There are tons of them. Most preferable that you work with an agent through the process as it’s a bit more of a gamble on finding foreclosures that will be financable.
Most will have had a trash out & there will be special addendums that you must sign agreeing to purchasing the home “as is”, meaning the bank is not willing to make any repairs. Have the most thorough structural inspection you can & good luck to you.
Almost all of the foreclosures are handled by real estate agents. The banks do not directly deal with the public. The bank is also the one that pays the agent, not you.
My only recommendation is to get an agent/broker who has at least 20 years experience. The previous RE bubble attracted many do-nothings who sort of rode the wave, but honestly have no clue how to really make deals.