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What is the benefit to a realtor to helping you buy a foreclosure?

Usually the seller pays the realtor fees but in the case of a foreclosure the bank (typically) owns the property so does the bank pay realtor fees?  Plus many are sold at auction so how does that work then?  
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October 21 2013 - Walnut Creek
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Answers (6)

Hiring a Professional  will help you. Your Realtor will represent you in your negotiations and purchase. You may pay them directly, but usually they are paid by the seller.
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October 29 2013
I think your question was pretty much answered by the responses above. Buying a foreclosed house at auction (the court house steps) requires all cash and has a much higher risk involved as you don't have the opportunity to inspect the house, negotiate price or terms, and have no legal recourse if you make a mistake.  An REO (Real Estate Owned) property is one that the bank has already foreclosed on, has listed with a real estate broker, and has put on the MLS.  Purchasing an REO is essentially the same as buying any other property that is listed by an agent and advertised on the MLS.  In an REO the bank requires you have to have an agent representing you to make the purchase.
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October 23 2013
The word foreclosure is often used incorrectly. Once the auction is over the word foreclosure should never again be used, that is the past. It is now owned by someone, and often the bank, so now it is a bank owned home and also called a REO property. The bank is the seller and they pay a Realtor's commission to sell it for them.


tim
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October 22 2013
Buyer representation through a buyers agent is the same whether it is a foreclosure or an individual seller.

The seller, in this case the bank, pays the real estate commission.

Most auctions you see advertised are foreclosure auctions where the bank will be one of the bidders.  The owner of the property is entitled to due process.  The final step in that process is offering the property for sale to the highest bidder. 

The bank is owed money and holds a lien against the house. In order to take possession of the property it has to be offered at public sale and the banks lien satisfied.  If you wish to bid against the bank to buy the property you can do so.  It will be a cash sale.

If the bank is owed 98,000 on the property technically you can bid 98,001 to buy the property.  Some auctions state a minimum bid increment of say $1,000. So if there was a minimum you would have to increase the banks bid by that amount.

You do not get an opportunity to go inside the property prior to auction.  You have no idea of condition. You bid in the blind.

After the auction the bank will send property managers to assess the condition and value of the property.  When it finally comes on the market with a Realtor it may be offered for sale substantially less than the amount the original owner owed.

The best way to buy a foreclosure is after the auction and the bank has it offered for sale with a Realtor.
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October 22 2013
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October 22 2013
There are different types of sales when the property is in default. The first is a short sale in which case the owner of the house is actively involved in the sale process. The bank will include the commission amount on top of the short sale amount. I am sure you are familiar with this.

The 2nd stage is an REO. This is where the lender takes the property over and hands it off to an agent to sell. In this case commission is offered by the selling party (usually the lender)

The final stage is purchasing the property from the auction. If the property is sold at the auction, they will not pay commission to an agent for representing you. You simply go there and and purchase the home often times without being able to see the property. You may pay an agent for their expertise if you'd like, but the seller will not pay commissions once the property is being auctioned off.

If it is listed on the MLS as a bank owned property, it will have a set commission. This is usually the case with whats called an REO/or bank owned sale.

As for the benefit to the realtor... if one is helping you out of good will, then he/she is most likely hoping you will let him/her list the property for you once it is time for you to sell it. That is one benefit I can think of.

I hope that answers your question.

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October 22 2013
 
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