Working with REO (real estate owned) properties and with sellers in foreclosure.

We’ve seen markets deal with the onslaught of short sales and foreclosures 15 years ago, but nothing comes close to what we are seeing today. The volume and rapidity of the properties cropping up is unparalleled.
What can agents do that are out there struggling to assist people fraught with problems?
While it may be easier said than done, it is important to consult an expert. There are resources out there available to the public such as the Housing and Urban Development website, free credit counseling services, attorneys with extensive experience with distressed seller issues, etc. It is even possible to use Google to find attorneys who advertise their credentials as distressed property experts. The thing never to do is to give advice or guidance when you are not qualified to do so. Taking a three-hour short-sale class does not make one an expert on giving advice on the short-sale process. However, there is much that an agent can do in concert with an attorney. I always advise agents to help the seller find an attorney before they do anything else.
Let’s assume there is a hardship as stated above. What is the process for the agent/seller to follow?
List the property at a price based on a detailed market analysis. The agent needs to be sure that they make other agents in the MLS aware that it is a possible short sale and that ‘all transactions including the amount of compensation, are subject to bank’s approval.’ The fact is that even if a home is listed at market value and a buyer comes along and makes an offer commensurate with that value, the bank may not accept the sale. There are cases where the bank’s price opinion may be higher than the offer on the table, and the bank may counter or refuse the offer if it does not conform to what they believe is accurate. I often suggest that the agent take a video of the home to truly document condition as some appraisals are done without a full walk through. Without documentation it may be difficult to make the case to the bank about why the home is not worth what the bank’s appraiser determined. Agents should always meet the bank’s appraiser at the property and provide them with comps. They may not use the agent’s comps, but the documentation could come in very handy if a conflict ensues. This is not to be taken as gospel that any bank will debate with either an agent or an attorney. Some will, others will not.
Lonnie Snyder
REALTOR®
Keller Williams Realty Southeast Sound
Phone: 206-406-2710
E-Mail : snyder@kw.com
Website: http://www.callsnyder.com/
Blogsite: http://renton-real-estate.blogspot.com/
Lonnie Snyder is a full time real estate agent and REALTOR® with Keller Williams Realty specializing in Residential Real Estate for buyers and sellers in Washington’s Kent, Renton, Newcastle and South Bellevue.