Q: Since the bank is actually the seller in this type of situation, how does a Realtor get compensated? I am interested in a bank-owned foreclosure but it will need repairs. I was looking into an FHA 203(k) (I think) loan, but obviously have to have help in doing everything that it requires. It would be helpful to have an experienced Realtor assist in valuing the home after renovations, etc. so that I do not jump into something that won?t pan out in the end.
?Anonymous, Greenville, SC
A: Excellent question. The bank (who is the seller in this case) is who compensates the Realtor.
Maria Jeantet is a Realtor? with Coldwell Banker C & C Properties in Redding, CA
A: You are absolutely correct in your assertion that a realtor is a valuable asset in your situation and specifically in a sale involving a short sale (pre-foreclosure) or bank owned REO property (post foreclosure). You?ll be happy to know that while the bank is involved in the negotiations and sales process in both of these situations, that is a short sale or bank owned listing, the bank will offer a commission to the buyer?s agent. The commission offered on a bank owned REO listing is usually 3%, or whatever is typical for the area and market in which the home is located. In the case of a short sale, the banks will occasionally attempt to reduce their losses by reducing the total commissions on the sale. This isn?t quite as common as it once was, however, it?s largely a factor of the size of the potential loss and the bank or investor involved (investor that owns the current mortgage if the bank is just the servicer and not the investor/owner of the loan). That said, I would strongly encourage you to engage the assistance of a realtor and one who specializes in distressed property sales (short sales and bank owned REO sales). These transactions require a very specific skill set and Realtors are best suited to assist you and ensure your transaction is successful!
Jason Opland is a Realtor? with Better Homes and Gardens Realty in Columbus, OH.
A: Find a South Carolina Realtor, which you can do through this website?s ?search for a Realtor? feature.
I always bring a licensed contractor with me to look at properties that are of serious interest to my clients. A contract will give you the best ball-park figure for costs to repair the home. This also gives you an opportunity to get your contractor on the ?approved? list for the 203k loans or find out your contractor is already an approved vendor.
Ask your local South Carolina Realtor to show you homes similar to the one you want to buy, but that already have the upgrades & improvements. Once you see those homes, ask your Realtor to prepare a CMA (Comparative Market Analysis) of the upgraded homes. The CMA will use SOLD homes to estimate the value of the upgraded homes in today?s market.
I hope this helps a little.
Denise Shur is a Realtor? with 1:1 Realty in San Jose, CA.
A: The bank being the seller enters into a listing agreement with a Real Estate firm same as you would and agrees to pay a commission. You want to select a Real Estate agent and a lender that is knows the 203k process to make it a smooth transaction.
Tom Sams is a Realtor? with Re/Max Alpha Realty in Moyock, NC.
A: Typically, the bank holding the title will have a listing agent to represent them in the sale. The compensation would be detailed in the listing agreement (which is between the seller and listing agent) and is typically paid for by the seller. The listing agent then can offer a broker?s cooperating agreement for any broker/agent who represents a buyer in said transaction.
Alex Cortez is a Realtor? with Wailea Village Properties LLC dba/Island Sotheby?s in Kihei, HI.
A: As the seller, the bank will pay the buyer?s agent commission; it is normally indicated in the MLS listing itself.
Doug Parker is a Realtor? with Prudential Calhoon Company Realtors? in Hilliard, OH.
A: An FHA 203K loan has their own inspectors and appraisers. They will inspect the property to assess the repairs and then the appraiser will appraise the home with the repairs in mind as if already done. FHA will not loan more than the property will be worth with the repairs. It is handled much like a construction loan, where the funds will be paid out directly to the contractor at equal intervals. So start with a Realtor who is familiar with these types of loans and get a market analysis of the area around the home so you have an idea of values in the area. Go to http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k/203kmenu
for more information about 203K streamline or conventional 203K loans.
Beverly Houlier is a Realtor? with Hilltop Chateau Realty in San Diego, CA.
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Related posts:
- How Do I Qualify For A 203K Loan And What Is The Maximum?
- If I Purchase A Short Sale Or Foreclosure How Are Realtor Fees Handled?
- How Do I Make An Offer On A Short Sale?
- Is the Buyer?s Agent Paid by the Buyer or Seller?
- What Is The Buyer?s Agent Fee For The Closing?
Source: http://www.realtor.com/blogs/2012/02/01/do-i-need-a-buyers-agent-if-i-am-buying-a-foreclosure/
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