Deutsche Bank REOs – The long drawn out search for a deal.

Well , today for one reason or another, I’ve managed to spend a good deal of time trying to track down a foreclosed property that Deutsche Bank owns in one of it’s portfolios.

 If you don’t know who Deutsche Bank is , or what REOs are , I’ll do a little education.

Deutsche Bank is a VERY large German bank , they have branches all over the world, and the US is one of the larger markets they have. They’re pretty big in buying loans that are originated from other mortgage originators.

 REO Means Real Estate owned , it’s what a bank terms a Foreclosure that is in one stage or another in their portfolio. They’ve taken the property back and are in the process of liquidating it.

DB is a large bank….VERY large , relatively rural area of Ohio , they seem to be the plaintiff in about 5-6 foreclosure cases per month. That’s a lot when you consider we have maybe 40-50 foreclosure filings per month.

Even though DB is so big, and they do control a very large portion of the market in loans, they have most likely one of the worst systems for locating their properties.

DB outsources all of their properties, and they will go USUALLY to litton loan servicing, which in turns outsources them to several REO asset management companies. These companies are the ones that “Give” The listings over to a real estate agent in the area to market, and find a buyer for the property.

 Quite a few investors and the like TRY to purchase the properties before they are listed with a real estate company. Some times, the properties are winterized by the agent’s crew, and various work done on the property. If a person were to buy a property from DB directly , they may save something along the lines of 5%-6% regarding the comission. 

 Having said you could save on the commission, everyone needs to realize that the properties most times are priced out by agents that work the market. REO assets are usually priced on a schedule that one, or several real estate agents set.

 For instance, you could have a property that starts at $100,000. At 30 or 45 day intervals, it drops a % of the purchase price till it’s sold. I personally have seen some (Low) properties sell for 35% of the origional list price. It’s possible to get a “Deal” on a REO property, but you NEED to be realistic about things. If the listing agent was good or at-least the person that priced the property was, they will take in to account the market, the condition and location of the property.

Sometimes there may be factors outside of the  normal scope of things the agent may of picked up on that could become a pitfall for a buyer/investor.

 Be careful when you look at anything and always have the appropriate people inspect the property. It’s one thing to get a deal, and another to buy something you think is a deal and find out the foundation is caving in.

http://www.realestatecircleville.com/foreclosures.html