Real Estate Investing Blog

REO Question:

Dear Michelle,Thank you for this email. Here is a question I have for you.

Staying in touch with [the] REO [department] at a mortgage company after the [auction at the] court house steps could work to secure a property before it goes to a local realtor[, Right?].

In NC, the price jumps 5% with each bid after the courthouse steps. From your experience, can one contact a mortgage company immediately after the bid reinstatement period with a lower bid–one closer to the amount for which the bank took back the property, thereby cutting off the 5% jump in price.

(This assumes there have been no bids save for the bank’s on the property.)

Michelle’s Response:

George,First - Yes. If you can GET TO the REO department or represenatative of a lender, AND - they will speak to you and give you info - you can can always SEE if they will PASS ON new REO leads to you before they give it to a realtor.

HOWEVER, They ‘usually’ have a policy that either/or, the purchase has to go through a realtor, or They MUST list it with a realtor once they take it back.

As far as the 5% jump after every bid - - - - - Where did you get that info?

And finally, your last question which is really answered by my above answer . . .

It depends on what their policy is.

Here is my take on it:

IF - you can talk to and then actually build a rapport with a lender’s REO dept or associate - go for it!

OTHERWISE,

Find out who the agent is that will be getting the listing (or has the listing) then, (1) build a rapport with them, then (2) make your offer they same way you would have if it were a short sale. IF the Charlotte (or other NC market) is overbidding to get homes that have been taken back - - do you really want to play in that arena? I would find another REO sandbox.

Here, it could be the city OR it could be the state. No matter how you are intending to acquire property - if you have “properly evaluated the deal” then you will know, by having set your own criteria, whether it’s a deal for you.

Don’t look to a market for a promise of hope! If you know, you know. If it doesn’t line up with what you ‘really’ want, then pass it by.

You know it doesn’t matter if another investor gets it at a price you wouldn’t pay - does it?

Best Best, Michelle

This entry was posted on Monday, June 25th, 2007 at 4:40 pm and is filed under Evaluating Deals, Deal Evaluation, REO, General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.