…Or A Squeaky Wheel Ticks-Off the Driver.
The old saying “the squeaky wheel gets the grease” does not hold true when it comes to bulk REO deeds. Here’s why and what to do about it.
There will be times when you have a cash buyer for one of the properties that you purchased as a bulk REO. Yet, you find that you cannot close because you do not have the deed to that property. What to do? Call your bulk REO list broker. It is the broker’s job to ensure you get the deed as soon as possible. Asset managers will talk to the bulk REO list broker…they do not want to talk with you!
I cannot emphasize this point strongly enough. Asset managers and their staff (the people in position to actually assign the deed) DO NOT speak with bulk REO list buyers. They may answer the phone, and manners dictate that they will not actually hang up on you, but they WILL call your list broker and give them an earful about being annoyed by your call. The result? Your deed will go to the bottom of the pile to be processed. The business should not operate this way, but it does.
In summary: If you are in a situation where you must have the deed, call your list broker and let them escalate the issue.
What to do in the meanwhile?
- Continue to offer the property for sale at your terms (don’t let your property age just because you have a deed dependant buyer—get another offer).
- Offer the cash buyer a contract for deed. This instrument gives the buyer full use and benefit of the property. Adjust the terms to 75% down payment, 25% due at the time the deed is transferred.
- Realize that deed fraud exists. Your buyer has a right to be concerned. Provide an affidavit of sale to prove you that you in fact own the property. Again, contact your list broker for assistance.
Why do deeds take so long to get?
Assets on bulk REO lists are foreclosed properties, the ones people walked away from, the ones no one else wanted. It is difficult to track down the prior deed. Once it is tracked down, a new deed needs to be produced according the very particular requirements of each county and state. Then that deed needs to be recorded. Recorder’s offices are not immune from the cutbacks all government services are experiencing. It takes up to six weeks for a recorder to get around to recording the deed. Yes, up to six weeks. Look at a few county recorder websites, they disclose this delay.
But wait! There may be more unavoidable delays. In addition to the six weeks required for one deed to record, some titles are transferred from the asset manager back to the bank and then to the list buyer. It may take months for a property to be recorded in your name.
The above process is followed for every single deed. Now imagine an asset manager’s office processing 1,000 or more deeds at one time. There is no need to feel sorry for the processing clerks, but do understand that they are overwhelmed by paperwork. When you call, you are interrupting the important work of actually producing deeds. For every ten minutes they spend on the phone with you, they will have to spend another thirty minutes just finding the status of your particular property—if they can find the status. Then they have to get back to you. In total, they just spent 50 minutes to give you an update when they could have used that time to actually process a deed. Is it no wonder that they get annoyed when a bulk REO list buyer calls?
When you need the status on a deed, work through your list broker and be patient. Do not put yourself in the position of ticking off an asset manger by calling his or her office directly. Asset managers view this behavior as a breach of protocol and it will not result in your deed being produced any more quickly. In fact, it may further delay the process. This is the one time where being the squeaky wheel does not work. If you must squeak, address the correct individual: your REO list broker.