I take a lot of heat for my criticism of banks and asset managers when it comes to dealing with REOs.  After my second article appeared in Barron's (The Eye of the Housing Hurricane), some folks wanted to lynch me.  Unfortunately, the good asset manager are taking the heat for the groups that could care less about the financial well being of their clients.
    We see all the ways agents fail at listings . . . and we also see those that trick the system.  Why?  Easy answer.  If they trick the system and hide the listing, the asset manager will continue to lower the price.  We saw one recently where the property sold for $50,000 below the current market.  But here's all the signals the asset manager missed:

1 - The listing broker was more than 100 miles away.

2 - The property was listed as being in an Area more than 20 miles away.  Anyone searching for the subject property area, would never see this listing.  That was either intentional fraud or gross negligence.  Either way, the asset manager should have caught the problem.

3 - The subdivision name was mispelled, so anyone search for that subdivision would never have see the listing.  Once again, fraud or negligence?  And why didn't the asset manager catch it.

4 - The data fields for the property sqaure footage, garage, rooms etc. was missing, so anyone searching by this criteria would not have found the listing.

5 - The price was a full 20% below the lowest price identical model in that subdivision. 

    We found out about this listing after we implemented a system to scan the MLS for listings like this.  We call them the "ghost" listings because someone does not want them to be found.  This particular property was sold for 25% less than what it should have brought if the listing was set up properly.  And this was just one of many.  Here's another horror story . . .

    We recently sold a home just two hours after it was listed by another office.  It was an REO from WAMU, and it was listed below market.  The listing was given to a one-woman office in another county.  If the asset manager had done any research whatsoever, they would have learned that this broker has a record of a license suspension and other infractions.  It gets worse.
    When the listing came across our screens via our auto-search for new listings meeting specific criteria, I was immediately notified.  I took one look and thought . . . BINGO.  And within a few minutes, one of our clients was calling about the home.  It had hit his Inbox through our auto-search distribution.  
    I tried calling the listing agent.  No answer.  I tried her cell phone.  Ooops, her cell phone number in the listing was wrong (see listing below).  I emailed her.  No response.  I then Googled her name and found out she owns another business.  I called that number.  No answer, so back to Google.  And there I found a number of someone that worked with her.  I called that number and left a message for this person to call the broker and have her call me.  A few minutes later the broker called.  It gets worse.
    Let me back up a moment.  Let's talk about the listing (see below).  The address is wrong.  There is no photo, even though we are allowed to load eight.  The are no Broker Remarks or Public Remarks, which is the selling copy to entice the viewer into calling about the property.  The listing shows a refrigerator and range in the home, but all the appliances were stripped out. The listing agent only has room dimensions for three rooms . . . and they are wrong. How about the $108 Association Fees that are actually $192.  And the sad part about this . . . is this is not unusual for REO listings.  Bankers and Lenders, I have two words for you . . . WAKE UP.
    This one gets worse.  When I finally spoke with the broker, I told her I wanted to show it that evening.  She gave me the code to the lockbox.  That's a no-no.  She was using a $20 lockbox from Home Depot instead of the secure electronic lockboxes the most professional offices use.  But the electronic boxes are $150 versus the $20 boxes these agents can pick up from Home Depot.  The $20 boxes can be popped open with a hammer and a screwdriver.  The only way to get into the $150 box is to saw it open with an electric saw.
    Within an hour of the listing hitting the MLS, I am at the house with two clients.  But when I get there, the house is musty, hot, and the electric is off.  In Florida, when the electric is off, so is the air conditioner . . . and that means mold.  I call the broker, and she really couldn't have cared less.  It gets even worse.  Instead of having the carpet cleaned, they just vacuumed.  It was so disgusting that my buyer's wife was so disgusted, she didn't even want to look at the house. Hey guys, $500 bucks and the carpet would have looked like new.  WAKE UP
    If lenders want to clear out REO properties and pre-foreclosure properties, they must spend the money and time to develop a network of experts.  But it gets worse!!!!!

    Our offer was accepted, but the contract the REO consolidator came back with was totally unaceptable, with terms that no seller in their right mind would sign.  So this house, just as many others have, will not sell  . . .  and will wind up in a auction, clearing at 30-50% what it could have sold for on the traditional market.  So when I say the lenders cannot even process a cup of coffee, this and just about every other REO we have worked on proves the point.  Case closed.