How to Find an REO or Short Sale Buyer's Agent
Reasons to Hire Your Own Agent to Buy a Foreclosure or Short Sale
Buyers don't always set out to find a foreclosure agent, known as an REO agent, or an agent who specializes in short sales, but they should. Buyers are attracted to these types of transactions because they want a good deal. As such, often REOs (bank-owned) and short sale listings offer buyers an opportunity to buy a home under market value.
Bear in mind, however, that not every REO listing nor short sale listing is priced under market.
In some ways, they aren't any different from any other type of listing. Buyers will find a Goldilocks' variety: some REOs and short sales are priced too high, some too low and some are just right.
If you're a first-time home buyer, you will greatly benefit from hiring a buyer's agent who has experience selling REO and short sale listings. Hiring a buyer's agent without REO or short sale experience is almost as dangerous as hiring the listing agent. You deserve an agent who will make your interests a priority.
Searching for an REO / Short Sale Buyer's Agent
In soft or falling real estate markets, many buyer's agents find the bulk of sales comprise bank-owned homes and short sales. If you can find a busy buyer's agent (not an agent who closes 3 or 4 deals a year), most likely this agent will represent a lot of REO and short sale buyers. Here are ways to find an REO / short sale buyer's agent:
- Referral From Friends, Coworkers or Family to REO - Short Sale Agents
Chances are someone you know has recently purchased a home. Ask for a referral to that agent, then call to inquire about REO - short sale experience. Referrals are the preferred and most popular method of finding an agent.
- Call an Agent Friend and Ask for an REO - Short Sale Referral
Agents who don't negotiate a lot of bank-owned or short sale transactions generally know which agents do. Agents judge each other by harsher standards, I have discovered, than buyers judge agents, so you're likely to be directed to a top-producing buyer's agent. Plus, agents regularly pay each other referral fees, which means the referring agent has an added incentive to make sure you end up in the right hands -- because if it doesn't close, they don't get a referral fee for you.
- Talk to Agents at Open Houses
Whether the host of the open house is the actual listing agent or another agent from the same office doesn't really matter as long as you aren't there to buy that particular home. Open houses give buyers a relaxed, non-threatening atmosphere to talk with other agents. You can ask the agents to describe for you a recent REO or short sale experience and find out how many of these types of transactions the agents typically close every year.
- Search for REO /Short Sale Agents Online
Many agents write blogs about their experiences. It's almost like reading a diary because you're given an inside peek at what goes on behind the scenes. Be careful you aren't suckered into a site where the agent relies solely on keywords for Internet traffic and doesn't really handle very many REO or short sale transactions. Ask direct questions, don't be afraid or timid.
One of my favorite agent sites is Active Rain. Scroll down to the menu of states, select a county, then a city, and read the blogs of agents who interest you. You can also search by "REO" or "short sale" from your favorite search engine site.
- Sort MLS records by REO and Short Sale Agents
If you have a friend in the real estate business with access to MLS, run a search by limiting the returns to REOs and short sales, and pull up the closed sales for the past six months in your preferred ZIP code or neighborhood. Look up the buyer's agent name on each of the sales, and then go to that agent's web site for more information.
Full disclosure: I also maintain a blog on Active Rain.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.