Finding An REO or Short Sale Buyer's Agent
REOs and Short Sales
The appeal of an REO or short sale listing is that the property can be purchased under market value. That's the good news. The other news is that not every REO or short sale is a peachy deal. An REO is a result of an unsuccessful foreclosure. A buyer for the property cannot be found so the property is repossessed and sold separately. A short sale occurs when property values drop and the seller is unable to get enough money from the buyer to pay out the mortgage. Providing the lender agrees, the house can be sold for less money than is owed the lender on the mortgage.
An Agent Who Knows Their Stuff
First-time buyers especially benefit from hiring a buyer's agent who is well-versed in selling REOs and short sale listings. An agent without this kind of experience is as risky as hiring the listing agent to work for you. Your agent should be making your interests his or her priority.
In a market that is soft, where real estate prices are falling, many buyer's agents discover that most of the houses for sale are either REOs or short sales. If you locate an agent who is genuinely busy, that agent is probably handling a lot of bank owned properties and short sales. You can find an agent with this kind of experience by getting a referral from someone who has recently purchased an REO or short sale home. Referrals are the best way to find a good agent. Call the agent and ask about their experience in the market you are interested in - find out what that agent knows about bank owned and short sale buying.
It's Not What You Know - It's Who You Know
Not all agents negotiate bank-owned or short sale transactions, but they usually know the agents that do, and they know which agents are good. As with any industry, those within judge by higher standards than those who are not in the industry - so if an agent you know recommends another agent, you can be pretty sure they're top notch. On top of that, agents pay referral fees, so it is in the referring agent's interest to recommend someone who can do the job well. The incentive is that the fee is paid when the deal is closed. That means they will recommend someone who can close a short sale, that way they get paid.
Making the Best of an Open House
Open houses are a great way to meet agents without being hassled, as long as you attend the open house without the intention of buying that house. You will have an opportunity to talk with other agents and ask questions about their experiences with REOs and short sales. Don't be afraid to ask questions. Since many agents write blogs, you can get a good idea of what goes on behind the scenes by reading about their experiences.
If you're connected with any real estate agents who have MLS access, you can check REO and short sales closings for the last several months by doing a zip code search. Check out the agents' names associated with the sales and then view the agent's web site to get more information.
Having the right agent working for you, one experienced in short sales buying, is an important factor in closing a short sale purchase.
