Since a majority of our business is centered around East Bay foreclosures, namely Bank Owned REOs, our marketing efforts tend to bring in a variety of interesting responses. Since I’m feeling a bit snarky tonight, I thought that I’d share a few of them with you in the form of the following how-NOT-to tips.
1. The first way NOT to buy an East Bay REO is to send me a one line email with no name attached.
“I’ll offer 480″ or “I would like to offer 250,000 for this house.”
That’s it. No name. No phone #.
I’ve been getting a quite a few of these recently. While I get the feeling that most of them are just scam artists, or seminar newbies; there have to be a least be a few that simply don’t know any better. I usually just ask them politely to contact me via phone so that I can better asses their needs, but that seems to scare them away. I have played phone tag with a handful of these potential buyers to no avail and have actually talked to a few, but half of these “connections” invariably lead to #2.
2. If you sincerely would like to make an offer, you’re going to need to put it in writing. Don’t expect me to relay a verbal offer to my client (the bank) and expect them to respond. They will laugh at both you and me and tell us to put it in writing if we really want an answer.
3. The third way NOT buy a east bay REO is to ask to buy via lease option. When buying a bank owned property, this simply is not an option. The bank has no interest in keeping the property on their books for any longer than necessary and for this reason an offer asking for a lease option will get flat out rejected.
4. The fourth, and final way NOT to buy an East Bay REO is to ask me to make a verbal offer to buy the note outside of escrow and w/o title insurance so that you can avoid transfer taxes & transaction costs.
This was an actual request from an investor that says that he’s does it all the time and I’ve been trying to work out the mechanics of this transaction for the past week or so. Still, it doesn’t compute. Why would a bank do that?
I did ask my client (the bank) if they’ve ever heard of such a thing and got a rejection email resembling something from #1 in this list- “all transactions must go through escrow” Plus, if the bank foreclosed and took the property back, why is there a note in the first place? If anybody has seen something like this and could enlighten me, I’d love to hear it.
So there you have it, 4 ways to NOT buy an East Bay bank owned property. In all reality though, I’m a glass is half full kinda guy and the ultimate goal of this site is to educate potential clients so that we can put some deals together, which means that I’ll be working on a companion post entailing what you SHOULD do to buy an East Bay REO.
You’ll just have to wait a few days though. Deal?
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