Tim Bell explains how to find bank-owned (foreclosure/REO) properties before they reach the MLS by building relationships with banks' designated foreclosure (REO) agents. He outlines the process—banks contact local contracted agents 1–4 weeks before listing to prepare the property—and explains why agents benefit from sharing pre-listing opportunities (retain higher commission, avoid MLS work).
The next one on the list, foreclosure properties. And I suggest that, and again, these are bank owned properties. These are properties that were where the people missed their payments and then the bank foreclosed, the lender foreclosed, they went to a foreclosure auction and the property was not sold at the auction. Nobody that was at the auction was a successful bidder. Basically the bank took the property back because they were by default the highest bidder on the property. Now a lot of people say, well, gee, Tim, I've called this bank or that bank to talk with them about their foreclosure properties and they won't talk with me. And you know what, you're right. They generally will not talk with you. Okay, so what can you do in order to find foreclosure properties, bank owned properties, prior to them getting to the mls? Here's what you can do. You can befriend a bank's foreclosure agent. Okay? Every bank in America that has any, that has any loans in your marketplace will have an agent that they have a relationship with that agent. They'll have a contract with them, they will have negotiated commission with them, they'll have a relationship with them. So when that lender, let's say for example, it's bank of America, bank of America, forecloses on a property, what they will do is they will call the agent that is their designated agent in your marketplace and they will tell that agent, yeah, we've got a foreclosure coming up, go out, take some pictures, get the locks changed, do a bpo, a broker price opinion, do some other things to get this property ready, prepare the sign and different things like that so that a week from now, or two weeks from now, or a month from now, we will contact you when we're ready, when it's gone through our process and we're ready to list the property with you. Typically they make that call somewhere between a week and a month in advance of it actually going, of them actually signing the listing and therefore it actually going into the mls. So if you know who those foreclosure agents are in your marketplace, then you can contact them and ask them to share those properties with you prior to them listing the property. It makes good sense for you and it makes good sense for them. It makes good sense for you because you get to hear about a property that nobody else knows about yet, that's not on the MLS and has not been advertised yet. Makes sense for them because they can sell that property without having to put it in the MLS without having to put up a sign, without having to hold an open house, without having to take pictures, without having to do all the work that they have to do and then put it in the mls. Also, they're typically going to get more commission because if they sell it directly to you rather than putting in the mls, then they don't have to share that commission with another agent who might bring in a buyer from the mls. So finding out who the bank owned agents are in your marketplace and then befriending those people and letting them know you're looking for properties can be a very, very effective method to find properties.
