Real estate owned (aka REO’d or bank-owned properties) are more and more commonplace in today’s housing market.  Some banks are willing to work with you, others are not.  The only true rule is that it’s like the wild west out there… everyone has their own set of rules and state laws can be ignored!

For example, “time is of the essence” in a real estate transaction.  By my state law, notification from the buyer to the buyer’s agent to the seller’s agent can stand when it comes to a full-binding contract.  Unfortunately the same is not true of bank-owned property.  Even when a bank agrees to a sale, sends final paperwork to the buyer, the buyer signs and sends back – until the bank ALSO signs, another buyer can snatch it out from under first buyer.

Other banks refuse to sell their foreclosed properties unless THEY approve the loans.  From Sonoma Couny, California, Cynthia Larsen of Safe Haven Realty reports on her experience,

Here is an example of the agent remarks in the MLS, not viewable by the public. These remarks are instructions for the agents as to when a home can be viewed and where to submit an offer.

“Bank of America REO. Pre-Approval with BofA required. Offers w/out PreApp letter will NOT be reviewed“

So this is us, Bank of America, myself and my pre-approved buyer walking away.

These are the days when rapport is absent from transactions between buyers and sellers – especially when the sellers are corporations.  I am finding buyers less likely these days to waste their time waiting for banks to try to dictate the rules everyone has to follow.  Instead, they are seeking to buy property owned by an actual homeowner.