Repaired bank-owned homes sell faster

This post was published 8 years ago. Please, read this page keeping in mind that this home may have sold by now. You can always check current status by calling or texting (530) 356 4500 The Address Realty DRE # 01710206

The appliances in this Redding REO came from a nationwide vendor.

Fixed-up REO homes sell faster, and for significantly more money. That’s the conclusion of this article about research by one of the bigger servicers, Field Asset Management (FAS). While their conclusion might seem like a no-brainer, the reason they are promoting the information has only to do with their self-interest, since they make money doing the work. Left out of the equation are the many local contractors, subcontractors, and vendors who could really use the work. Often, contracts are awarded to insiders on a national basis at distant large firms, shutting out the benefit of the work to locals.

It’s a shame. But typical of the ‘housing crisis’ money flow. It’s all in who you know…

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2 thoughts on “Repaired bank-owned homes sell faster

  1. Local FAS contractor

    Just a correction. FAS does not do the work themselves, thereby taking away from our local economy, nor do they employ “insiders”. While they do make a % on the rehabs, it is most often the local contractors who are on their vendor list and in good standing who are awarded these rehab jobs. There are a handful of local contractors who are surviving this struggling market because of the steady flow of work from FAS. The only “insiders” in this scenario are the local contractors who have worked hard and established themselves as reliable vendors for FAS.

    Notably, the pay is often slim and it is a “take the good with the bad” relationship. But the root of that issue lies with the lenders (place Fannie Mae at the top of that list and all other lenders seem to follow their lead), who continually grind the asset companies (such as FAS, Safeguard, etc) so that the income for both the asset company and the contractor is continually decreasing while the scope of requested services are continually increasing. Contractors who fall short of completing their services in both a timely and professional manner are quick to have their workload lightened to another vendor in order to satisfy the increasing demands of the lenders.

    FAS is simply the “middle man” and takes over many of the functions that used to befall the broker. While this frees up the broker to focus on marketing and selling the property instead of chasing down contractors to get services completed, it also creates a huge communication gap for the brokers, who often are not informed as to which Vendor is completing which services on their listings.

    Reply
    1. Skip@RHB Post author

      I don’t often approve anonymous comments, but I’m making an exception here to respond. A list of approved vendors is by definition a group of “insiders.” The work is not available to bid by anyone. Nor are the homes ever put up for sale except by agents who are also insiders. I’ve no doubt the local hands who actually perform the work suffer the “continual grind.” But the fact is that there is big money at play in foreclosures sales and rehabilitation, and near zero oversight or transparency in the dealings. A surefire recipe for collusion and graft.

      Reply

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