Posted by Tanya on October 15, 2002 at 22:35:54:
Connie, first of all, find out if the mortgage broker is an owner/agent – this means that they actually own the properties themselves, and they’re required by law to disclose this. While some brokers [usually real estate brokers, not mortgage brokers; there is a difference] will buy property to resell for a profit, in most cases they’re just listing the foreclosure for the repossessing lender. Personally, I always prefer to buy foreclosures that are owned by a lending institution and NOT a real estate broker, b/c an owner/agent’s motivation to sell is different from a financial institution’s – I have more leverage w/a bank or a mortgage company, even if the foreclosure is being LISTED by a real estate agent. Lenders will obviously try to get as much as they can for the property at first [and who can blame them?], but those non-performing assets are a liability for them and usually they can’t afford to hold onto them for too long; I’ve bought property from lenders that I know they sold at a loss b/c they were just that desperate to unload them.
You’re right about gov’t lenders not negotiating on their prices, b/c they don’t have the same incentives that conventional lenders do; however, I’ve been told that in other parts of the country [but definitely NOT where I live!], gov’t repos are still listed far enough below market to be worthwhile deals, depending upon your intention for the property.
Hope this helps!