Aiming to Change Bank-Owned Home Buys
Atlanta, GA-Helping potential homebuyers and investors navigate the process of buying bank-owned homes has become big business, especially given the current state of the housing market.
Many websites offer information about foreclosed homes that are for sale, but a new company entering the fray is trying to change the paradigm.
RealtyInvestorBid.com, Atlanta, is trying to contact bank REO departments and others in the mortgage industry to spread the word about their new service. The company is trying to generate interest from homebuyers through radio advertising and publicity from sources like CNN and newspapers. The MBA annual also offers an opportunity for the company to introduce itself to a larger audience, said Charles Willis, one of the firm's founders.
The company hopes to attract interest from banks selling foreclosed homes, unfinished construction and land. The company envisions that the bidding process can be done in a 14- to 20-day timeframe. That's a significant improvement over the time and expense a bank would face pursuing a foreclosure, a feature that may make RealtyInvestorBid an attractive route for pursuing short sales in today's environment.
The company's value proposition is that listing real estate-owned is free, as is registering to bid on property through the site. Instead of charging sellers for listing the property, RealtyInvestorBid hopes to make money by charging buyers when they purchase a property. The company plans to charge buyers 1% of the purchase price or several hundred dollars after they successfully bid on a home using the website.
"There is no charge to you or your seller," Mr. Willis explained, referring to the banks that own REO and their selling agents.
Mr. Willis is no stranger to the mortgage and real estate industry. He used to buy unfinished construction directly from IndyMac Bank. His strategy was to complete construction and sell the property.
RealtyInvestorBid.com hopes that the site will become a service not only for banks with REO to sell, but also for homeowners who find themselves in trouble and need to sell a house.
"I think this could be similar to Craig's List in a way," Mr. Willis said.
The company began its service focusing on its core market in Georgia, but is planning to go nationwide on a fast basis starting in October.
As vice president of marketing and promotion, Mr. Willis hopes that appearing at conferences, including the MBA annual, will help to generate the publicity needed to drive traffic to the site and get investors to bid online for the property. And with today's economic environment putting a heavy focus on foreclosures, selling REO is likely to be a key topic at the MBA and other upcoming shows, he said.
He hopes real estate agents will also support the service, because it will potentially drive traffic to their inventory of homes for sale. But he believes lenders may have to put some pressure on Realtors to get them on board.
"The banks need to know that sometimes those REO brokers hinder a lot if the only thing they do is put a sign in the yard," Mr. Willis said. "What I'm trying to do is let these bank asset managers know this is here and it is something free that you can use."
If a buyer is interested in a property, they contact the selling agent or whomever the bank assigns as a contact for the home.
In September, Mr. Willis said that RealtyInvestorBid.com was in talks with several banks as well as a large REO auction firm about participating in the site.
"We would like to talk to as many banks as possible," Mr. Willis said.
The timing for RealtyInvestorBid could not be better. With the inventory of bank-owned homes rising and putting a strain on asset management departments, the market is ripe for new outlets to help both banks and troubled homeowners to sell their property quickly, Mr. Willis believes.