Some Sacramento buyers looking for bank-owned REO homes are finding it difficult, if not impossible, to make an offer on a bank-owned home. Because not every REO lender will sell to them.
How can that be, you may wonder? Aren't banks eager to dump their foreclosured homes as quickly as possible? Why would an REO bank refuse to sell a home to an able and willing buyer?
John and Mary, let's call them, sent me an email asking to see a bank-owned home in the Alhambra corridor in Midtown Sacramento. This was a property I had toured several weeks ago, so I knew it had no electricity, which meant we couldn't see it after 4:30 because it would be too dark.
I pulled up the listing in MLS to check that it was still available because many of the really REO hot deals fly into escrow within weeks, if not days, of listing inception.
The confidential comments to agents clearly stated the bank will not sell to a buyer who was obtaining financing, meaning the bank will consider offers only from all-cash buyers. This foreclosure wasn't on the market long enough for the bank to reconsider this requirement either.
I explained to John and Mary that they were not candidates for this home because they were not cash buyers. Stands to reason since the second floor was gutted (health and safety issue) and the first floor was not much better; it was a definite fixer.
Not only do some banks refuse offers with financing, some of the homes are unsuitable for FHA financing as well, unless the buyer is willing to take out a Streamline K loan. And those loans carry higher interest rates.
The fact is homes in Midtown Sacramento are much older and can carry deferred maintenance, which reduces market value on those bank-owned homes. Some are for sale under $200,000, which makes buyers' eyes bug-out.
"But you don't understand," Mary replied, "I want to buy this home. And I want to buy it tonight." I apologized to them. Would they like to see a couple other bank-owned homes in that vicinity? No, they did not.
If John and Mary had been willing to meet with me to discuss their purchase options, I am certain I could have helped them to buy a bank-owned home, and they would be in escrow by now. I do it every week. Bank-owned homes and short sales are my specialty. But some buyers believe they will get a better deal by driving around town and calling listing agents who don't answer their phones. I can't help the foreclosure buyers who don't want to be helped.
Photo: Big Stock Photo
The Short Sale, by Elizabeth Weintraub, coming from Archer Ellison in January 2009.
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Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available through bookstores everywhere and at Amazon.com.
Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.
The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
