REO PITFALLS

REO or real estate owned properties can pose a few problems for potentials buyers the least of which is non-compliance.  Let me explain.  A friend of a friend found a foreclosed property that she liked.  She drew up the standard Arizona real estate contract and also has a contract from the bank who owns the property.

She was scheduled to close on March 15th.  It is March 20th and she still has not closed.  She asked me what she should do.  Well, I asked why her realtor had not issued a cure notice to the bank.  What about the bank’s representative?  Both the buyer and seller agent should be all over these properties.  

Now because the property has not closed, this woman is going to lose her rate lock.  She’s frantic.  

This should not have happened.  Her agent has a responsibility to represent his/her client.  This is a lack of representation, in my opinion.  How could they have let this ball drop?  

I know we hear horror stories about short sales and foreclosures.   The banks are inundated with these properties, but the housing crisis has been going on for awhile.  The banks need to get their act together.  It’s extremely frustrating for all parties when no one knows “who’s on first”.  

Buyers need to beware of the pitfalls of buying a foreclosed property.  In addition, be sure that you have an agent that stays on top of the situation.   There’s nothing more stressful than rearranging your life around a closing date and having it put off due to incompetence.