REO's and the Shady Dealings...

I was (still am ) very interested in an REO listing that I saw here in South Florida.

I called the agents multiple times and went as far as saying that I had cash and could have a deal done by the afternoon.

btw, this has been a couple of weeks back, the property is still being listed and every time I call they say it has temporarily taken out of the market. to try them "by the end of the week"

I just didn't understand why they are doing that.

It's called "REO Shopping". They get their names on an REO list to become "listing agents". They set "list prices" with the banks...but won't sell them when an Investor calls and offers. They always make the comment "Oh, that one went for WAY more than the listing price" or "That one is under contract" or "That one is off the market".

I am convinced that they are taking these properties and "holding" offers until they can get offers that are a lot bigger than the "list price". I am not wanting to accuse some of them who are actually legitimate agents / brokers.

As an example, there is one in particular here in our area who is the "listing agent" (or the guy who gets the paperwork...don;t know how much actual "work this guy really does). You can't ever get him on the phone, until the property is "under contract" or is "no longer listed" and every one of them are sold for "WAY over the list price". But they are sold "way over list price" because every offer that was given AT list price is NEVER presented to the bank. This guy actually had NO SIGN in front of one of his "listed" properties until I called him asking about it, then the next day, up goes a sign, info flyers get put in the house...and I can't get him on the phone again!!!

Again, while I don't want to generalize ALL of the agents and brokers, by any means...but the last time I mentioned this on this site, I had someone who was CLEARLY an agent, try to ask me "qualifying" questions about how it was probably MY FAULT that these agents are not getting the offers in.

Bottom line...as investors, we have to make sure that we have a Realtor who can get to the bankers, the lenders, the entities that actually OWN these properties so that we can get the offers to them, AROUND these Agents / Brokers who are trying to maximize commissions instead of getting these properties back into circulation. The lenders / banks could then release these Foreclosures that they are trying to "keep off the market" to prevent a severe collapse in housing prices. and we could all (investors) have even more opportunity to buy and sell properties.

Just my opinion...but this "REO Shopping" has to stop. I didn't know if anyone knows who to report this behavior to...but if I can do anything about it...I am going to.

Jon

the ghost ad and building a list- plus they sometime keep the propeties and hold out for retail prices-higher prices = higher commissions

I don't think that they catch on that the more deals = more money.

80% of REAgents do 20% of the deals

20% of REAgents do 80% of the deals- these ae the agents that make the bucks. Find one of the 20% and you'll be just fine

IF you can talk to the loss mitigation dept directly you can get better deals AND financing- ask them which properties they want off the books the most

you can report it to the real estate commission in your state. i would be sure to have lots of information supporting your complaint because they are going to stick up for the agents first and foremost. i am a realtor in IN and am quite sure offers i submitted were never given to the banks/sellers, but how do you prove it? hopefully, once you report what is going on, the commission will look into it and find something.

I found another Agent who has had plenty of REO experience...and he is bent on getting us "more deals". As time goes on, he will be the guy that I use exclusively...he agrees with me that these guys are doing it the "wrong way".

I am still looking for the answer to who I need to report these shady dealings to...secretly. I do not want to be "black-balled" by agents, but the fact of the matter is that I have it on good authority that the lenders and the top attorney for foreclosures in the State is "holding" over 1200 foreclosures in the Birmingham, Shelby County area ALONE! (Anybody want a piece of the ACTION? PM me, for goodness sake!! I have an appointment with the loss mitigation dept for Regions Wednesday...I hope to go directly to the source.

We will see what happens...but in the mean time...I want to stop this REO shopping if I can.

I think I've seen the same thing here in Indiana. In the future, I am requiring a letter of rejection (on company letterhead) directly from the bank. I've seen it too many times where the agents don't actually submit offers to the banks in hopes of receiving a higher offer and more commission.

bill9710

BINGO- DEMAND a letter of rejection on Company letterhead

NO ethics and should have license revoked-lazy and greedy

Jon,

National Association of Realtors

Bill is exactly right on post #6. However, you must however have a written offer submitted with your agent. A verbal is meaningless. By law, an agent MUST submit a written offer to purchase to the seller. If an agent will not present a written offer for you I would contact the board of realtors and let the agent know you are planning to do so. If they refuse to write up an offer I would do the same. When offering on an REO try and find the ACTUAL listing agent, the one that got the listing agreement from the lender, not just any agent. Finally, find an agent that will present your written offers every time. No written offer, don't expect a response.
Jon, a lot of times it is the lenders (asset managers) telling the agents what to do. Many now require the agents to list the property on the MLS for several days before they will accept an offer. I constantly get the old "multiple, offers, need highest and best" and the property is still listed 3 weeks later! They want top dollar, that's all there is to it. Unfortunately, there seem to be a lot of investors willing to pay what I feel is too much. Buy and hold guys, idiots, rookies? I don't know.

Here is something else. This is just my opinion. The banks are in no rush to release the famous shadow REO inventory because they don't have to! OR need to do conventional mortgages. Obama gave them a bunch of free money. They are investing that money and getting returns on it, why should they take a loss on the REOs they have or assume the risk of doing a mortgage for regular buyers? They can sit on their REOs and slowly release them for top dollar because they CAN. I have heard of the "flood" of REOs hitting the market for 3 years now and it has not happened nor do I think it will happen. We just have to make multiple WRITTEN offers on multiple properties. Don't expect to get our offers excepted the first time, follow up and make 2nd, 3rd and 4th offers (same offer) And if no one pays more than us, the bank will accept our offers over time. I have made some very good money on REOs that took 10 to 12 weeks to get under contract. REOs are tough right now it seems, the banks have them listed WAY high and people are paying the price. It must be buy and hold guys because the rental market is so strong. That makes it tough to double close or fix/flip. In my area I see an increase in wholesale prices while retail prices are stable or decreasing.
Even though I still offer on at least 2 REOs a day, I am having great luck dealing directly with distressed homeowners right now. NO REALTORS!!! Was doing more REOs this time last year. Strategies change, REOs could be hot again at any time.

Good Luck Young Jedi!

Michael Mangham
MD Home Acquisitions LLC

Jon it is going on all over the country, I posted an article a few weeks back it tells of the problem and gives the # to report it to the FBI. I have called and done so on a couple Agents here.

I sent one agent a copy of the story and he tried to tell me banks don't send rejection letters out. He had me in a holding patern for four months then all of a sutten someone put in a better offer, I don't think so. He can prove it to the Feds when they call on him.

btw that is Story about Foreclosures I will bring it up for everyone to read.