i just got off the phone with two fannie mae representatives. i found an reo property that is not listed in the mls and i thought to myself, great a pocket listing, so i call the bank and they forwarded it to fannie mae. fannie mae states they own the property but is not able to take offers at this time because its not on the market??? isnt that my goal?? to make offers on properties that are not on the market? someone help me please. they refuse to give me a listing agent info. they also stated they are making repairs to the property. thanks with any info provided.
Hi,
You have just discovered the world of "Reserve" properties! With all the foreclosures happening the lenders have been keeping properties in reserve as not to flood the market any further and cause a continued fall of property values.
In California, Nevada, Arizona and Florida there are thousands of these homes sitting, some have not been touched and have been sitting for 2 to 3 years now. My understanding is that once the foreclosure crisis is over and the number of foreclosures are back to 2005 levels, it could take upwards of 10 years to release this stock of “Reserve” property out of inventory.
They can not and will not make anything set in reserve available until there ready and will not flood the market to cause continued colapse of the market values. If the property has Mold, Asbestos, lead based paint, health code issues it could very well be being mitigated and remodeled depending on the state and occupancy (Fire / Life / Safety Codes).
I would bet that in Arizona and Nevada that reserve properties could total in the tens of thousands of properties by the time the crisis ends. Virtually all REO properties are let through realtors as the transaction has to be arms length and even banks who sell there own inventory will involve a realtor and pay a fee for an intermediary to represent the bank.
It would not surprise me that “reserve” properties exist in some quantity all over the country. If you find a bank owned property without a realtor sign, you might as well pass as it won’t come to market any faster.
If the lender will not sell the property for 7 years, there will be no realtor until it’s listed and when it’s listed it will have a sign on it!
The mortgage lenders are also selling properties like crazy as they are probable selling 7 out of every 10 properties as they are foreclosed on and reprocessed.
GR
thanks for the info gold river. my thought process with that property was that it was a pocket listing. im guessing that the fannie mae homes are excluded from the properties that are reos that you can make an offer on.
am i able to make a offer on a property that is reo but not on the mls? my guess is yes but now it cannot be affiliated with fannie mae i guess. if anyone can clarify please do. thanks again goldriver :smile
Hi,
Right now any property that some portion of the lenders loss is being paid by the Federal government is subject to being held off being listed and sold, to help financially devistated area's of the country stabalize there real estate market.
This can include but is not limited to properties financed by Fannie Mae and Freddie Mac or parts of properties guaranteed by Federal mandate; but also can include properties where PMI (Principle Mortgage Insurance) was paid by AIG or other insurers and the loss absorbed by the Federal government.
Just because it is a REO property does not mean it has to be for sale!
In 99.99% of REO’s even when the lender is advertising and marketing the property themselves, they will ask you to contact there real estate agent as they want to provide some buffer between the bank and buyer to insure an “Arms Length Transaction”.
Pretty much I do not make offers on properties that are not being marketed for sale, I know there are tens of thousands of homes that are purposely being kept in “Reserve” as to avoid flooding the market and continueing to cause more foreclosures and unstable home values.
This is actually a good thing for us as investors as it’s hard to make a profit on a home you buy for $1 dollar and sell for $2 dollars as it does not even cover cost’s, but if the Federal Government did not stop flooding the market with homes, area’s like Phoenix and Las Vegas could continue to slide until the market hits “ZERO” because in a lot of cases properties have already lost 60% of 2005 value.
When you go into your data feed to find owner, if a bank or federal agency owns the property it’s not worth pursueing until it comes up for sale.
In Phoenix and in Las Vegas there are tens of thousands of REO properties for sale on the MLS system, and a lot of lenders asking prices are 10 to 25% below FMV for pristine properties, and I am not afraid to make an offer for 50 or 60% of FMV because the banks want them sold and off there books.
With that said I might have to make 50 offers to get 1 excepted!
GR