Posted in Buyers, Cincinnati, Foreclosures, Real Estate, Realtors, TREO, Tuesday Morning Coffee
As a Cincinnati real estate agent, one of the most common questions I get is “There’s this foreclosure in my neighborhood and no one has touched it for months. How can I contact the bank to buy it?”
Well in order to really accept the answer of this question you have to first dismiss the belief that the large banks are acting in a responsible manner. Here’s as short of an explanation I can provide of the mortgage mess that has played out over the past 7 years:
1. The government decided that homeownership is a “right” not a “privilege” and pushed banks with financial pressure and incentives to issue loans that made no sense to people who should never of owned property.
2. Small banks and financial institutions popped up out of nowhere to take advantage of this financial heaven and everybody got really rich.
3. The market crashed, small banks/financial institutions were absorbed and mortgages got passed through this MERS system which tracked mortgage ownership as loans and companies were sold over and over.
4. Eventually some assets got lost in the mix or wound up belonging to companies who aren’t prepared to handle them or really don’t even know they are owners.
5. As a result, homes tend to get lost in the mix and no action is taken on these properties until a situation presents itself where the bank decides to take action.
So now to answer your question- How can you buy this Cincinnati Foreclosure? Well, it’s practically impossible to buy directly from the bank and here are a few reasons why.
1. The smaller, local banks are generally well aware of any loans that are behind on their payments since bad mortgages hit them harder then they do at Bank of America. So you are probably dealing with a bank from a different part of the country and tracking down the person responsible for this sale may be quite difficult.
2. Even if you were to write this bank a check for $100,000 – the bank likely wouldn’t know if they are getting the deal of a lifetime or being robbed! They have never been in this home and will not agree to a sale without doing their own due diligence. This likely comes through the support of a local real estate agent.
3. Bank typically follow a standard procedure when they sell their homes. They promise a listing to a local real estate agent in order for that agent to handle several duties before and while the home is up for sale. These duties include negotiating the removal of occupants, overseeing any possible repairs, marketing the home for sale and negotiating/overseeing the closing process. They likely won’t deviate from this process since so many steps are necessary to protect their interests during the sale. You’ll likely need to wait for the home to hit the MLS.
Now here is what you CAN do if you come across a property that appears to be a foreclosure – contact your local Cincinnati real estate agent (me) and they can do a foreclosure search for you to find out if it has been foreclosed or is on track to be foreclosed. They can also determine the bank handling the foreclosure.
Next – you can keep your eye out for a “No Trespassing” sign taped to the front door or window. This is the first step a real estate agent takes when they are assigned a foreclosed property and this agent will be the most knowledgeable local party. Follow up with them and you will be given an idea of when the home will come onto market and eventually, a possible list price. This will allow you to get a jump on buying that foreclosure in your neighborhood.
Hope this helps and don’t bother to reach out to me with any questions or to discuss YOUR Cincinnati neighborhood foreclosure.