Richard has years of experience in dealing with bank owned properties. He has sold over a hundred to his clients as a buyer’s agent, and in addition, he sells properties for several banks, bringing unique knowledge of the inner working on bank owned sales. If you want an agent who can expertly guide you through the foreclosure process, contact Richard
A Brief Timeline of the Foreclosure Process:
A property becomes foreclosed through specific actions a bank takes after the owner fails to make payments. These homes are then evaluated by the bank and placed for sale on the open market. The perception is that a bank-owned home (also called Real Estate Owned (REO) or Corporate Owned) is less expensive than other homes, however this is usually due to the homes’ degraded condition.
The earliest a bank can foreclose on a home after a borrower becomes delinquent is about 7 months. First, after 3 missed payments, the borrower is in default. The bank can place a Notice of Default (NOD) on the home and files this document with the county. It is a public instrument. Many sites sell these lists, however they can easily be obtained from a broker or title officer. After 85 days the bank can file a Notice of Trustee’s Sale (NOT) which announces a 21 day deadline before the home will be auctioned off.
After the auction, if no one buys the home, or if the bank buys back their own note, the home is assigned to the REO division of the bank. The REO division will spend 1-3 months securing the property, evicting or relocating the occupants, evaluating the price, and then placing it on the market. Banks always place homes on the local MLS and most require a minimum of several days exposure before accepting an offer, but not all do. Banks generally price their homes aggressively, and REO properties in LA consistently sell for 99% of asking price on average.
Banks are not emotional about selling, and they are never specifically motivated to sell an individual property. If the property doesn’t sell, the bank simply waits and reduces the price every 3-4 weeks.
If you have any questions about buying a bank owned home, feel free to contact me anytime! As a Bank of America approved REO agent, along with working with many other banks on REO transactions on both the buyer and seller side, I have extensive experience with foreclosures and can help you get answers to all of your questions. I also publish a weekly list of the best foreclosure deals on the market.