Chances are, if you have been in the real estate market over the last four years, you would have looked at a foreclosure, bid on a foreclosure, bought a foreclosure or know someone who has. You may also know that the buying process of an REO (“Real Estate Owned” aka: foreclosure) can be exasperating for all parties.
I have represented more than my fair share of clients that have struggled with the process, including getting a response from the REO Broker, not the bank, but the Broker who is representing the bank and the asset. REO agents are Brokers that specialize in foreclosed properties. This has become big business for these Brokers over the last 5-6 years. These Brokers solicit foreclosed listings from banks and third party asset management companies. It’s not unusual for an REO Broker to have over 100 REO listings at one time. As such, we have seen a real deterioration in service from many REO Brokers. Now, let me say at the outset that I know many fine REO Brokers and have had a pleasant experience with a few. However, in recent months, I have been hearing more and more complaints about how REO Brokers are handling their business. The complaints from consumers and other Brokers go something like this:
• The listing Broker never returned a single phone call or email.
• When I did get through, I could only speak with an assistant and never with the Broker.
• I couldn’t get any information about the property, the status, or the bank before I made an offer.
• The Broker didn’t follow the procedures and process the paperwork through to the bank.
• They did not get back with me in a timely fashion.
• They only care about how many offers they get.
Some of these complaints are valid and again I want to reiterate that there are many fine REO Brokers doing business the right way, but I am sorry to say it’s not the vast majority.
The question I get more than anything else is, “Can anyone do anything about it?” and the answer is yes, you can. If you are experiencing problems and the REO Broker is unresponsive here is what you can do:
• Call the bank that owns the property and file a complaint against the listing Broker. Your Broker can usually obtain this information for you.
• If you think you have been wronged and have a valid complaint, you can file a grievance about the company or Broker with the Colorado Real Estate Commission.
• You can also file a complaint with the REO Broker’s managing Broker.
The bank is the best place to start because if they get enough complaints about a particular Broker, there is a good chance there will be a change or they’ll take away his or her business. Consumers and Brokers deserve better and can demand change, but change requires action.
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