Sean,
Have you or anyone else had any success buying from the lender immediately after the auction, when the property receives no bids and therefore reverts back to the bank? I was contemplating contacting the lender directly after the auction, before they fix up the property and list it with a real estate agent, and offer what was the minimum bid at auction. At least in theory, it seems that if they were willing to let it go at auction at a given price, then they would be willing to let it go a few days later at the same price, assuming I can offer them a really clean and easy sale.
And if this strategy is viable, does it make sense to do my own title research and offer to buy the property with no clean title (just as I would from auction), in order to motivate the lender to let the property go in this manner?
The main reason I would prefer this strategy to buying at auction is to finance a portion of the purchase price, which will greatly enhance my ROI.
Thanks in advance.
Comments:
It is certainly possible and is done though it depends a lot on the lender and their particular policies. Some have outsourcing agreements or other policies that make it very difficult to do anything outside the lines despite the fact that it may be in their best interest.
I will say that there is no reason to offer to clean up title. If you want to make concessions, be willing to close quickly, take the property as is, or handle the eviction.
Still in the current market no concession seems to work as well a being able to pay in cash with no financing. So if you have the cash, and are simply looking to use financing for ROI reasons as you indicate, you may want to consider closing as a cash transaction, and then immediately doing the loan - likely could even be done same day given that your lender and title co are willing to be a bit creative.
Does anybody know any bank that is willing to sell after auction without listing with real estate agents? I've tried a couple of them including countrywide, well fargo and there is no sucess.
Hi Kenny - this may actually have more to do with your approach then then the particular bank. For example we have a customer that regularly buys individual properties from Countrywide. Note that most banks are going to have a policy of listing their properties with an REO Broker, and many even have outsourcing agreement with an REO Servicer to handle everything for them. As such your lack of results isn't surprising - but it also doesn't mean getting direct deals done is impossible.
The other thing you need to keep in mind is that generally the banks don't want to sell properties directly to consumers. They'd rather pay commissions and have the Realtor (and the Realtors E&O insurance) on the hook to get the job done. You may find you have greater success by having a Realtor submit your offers to the banks, perhaps with only a buyers side commission (thus saving the bank the listing commission).
To entice a bank to do a direct deal before it is listed you want to carefully consider what you are offering. For example all cash and very quick closing times will help a lot.
Finally, do keep in mind that while to you eliminating Realtor commissions may seem like a powerful incentive for the bank and an opportunity to get a better deal for you - the bank is more likely to see it just as increased risk with little benefit.
Hi Sean, Thanks for the advice. They refused me without even looking at the offer when I called them up. They told me it's their policies not to deal directly with consumers and I can't buy until the properties are listed. I know a couple Realtors but I don't think they can do a better job than I did. Do you have the contact info of the realtor who help a customer to buy from countrywide? thanks
Hi Kenny - he is an investor buying for himself rather than for others but I'll send him an email with a link to this thread and perhaps he'll respond. Best of luck.
Hi! your guys are talking about similar things I do. I am a broker with several agents. They have written offer with deposit and approval letter.
But the prblem I have is how to track down the right reo manager with phone number. Most of the case the reo department does not have phone or disconnected. I need the reo manager info of WAMU and bank of America.
Can you advise how to get them?
Thanks
The LaneGuide, www.laneguide.com, is the resource the title companies use to find contacts at banks. I highly recommend them.
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