Why do signs get put up early on some properties? Usually these are Vacant REO, Foreclosures and Bank Owned real estate. Most of the time the listing agent will have the sign go up as soon as they get the “Listing contract” from the bank. However, there are still many steps that need to take place before a “sales price” is established.
The reason for a Sign Up request on a Bank Owned Home is to “mark it” as being for Sale – This deters the “prospective squatter” from setting up residence, getting utilities turned on in their name and getting mail to the home – Thereby, in California, Needing to be evicted.
This can take in excess of 6 months to evict a “squatter” in the California Judicial system – furthermore it can cost the “foreclosure owner” in excess of thousands of dollars.
(personally, I have ran into a Squatter Twice – 6 months apart – at two different bank owned properties when I was approaching to verify occupancy with the intention of securing a cash for keys agreement. you should have seen the look on the guys face the second time we met…)
When the sign is placed at the property, it causes way too much attention for a potential squatter – usually keeping them away.
A final word about Real Estate signs in general:
What is it about real estate signs? Are they necessary to sell a home, condo or town-home? I would say not 100% necessary – but they do give a certain (positive) percentage to the “Things to do to Sell a Home” balance sheet. The more a Seller can have on the (positive) side of their “things to do to sell my home” balance sheet – the better and more likely their agent will be in successfully selling their home, condo or town-home.
Furthermore, we do not represent buyers on the Bank Owned Foreclosures we have been trusted to sell. We tell all of the buyers, that call off of the sign, to obtain their own representation. Look at it from the Foreclosure Owner’s point of view – The bank has instrusted a Real estate agent or real estate team to sell their asset at the best possible price and in the shortest amount of time.
- The Listing agent knows the inner workings of the bank and how they reduce their prices.
- The Listing agent is the one that obtains and submits offers directly to the Asset Manager.
- The Listing agent’s commission is usually not increased, unlike in a Standard Sale, when they bring the buyer to the table to purchase the REO asset.
- The Asset Managers know these facts too – that is why every offer that is submitted by the Same REO agent that holds the Listing Agreement needs Senior Management Approval. (you notice not just Management – but Senior Management).
You as a Buyer will be better off seeking your own representation when approaching Bank Owned and Foreclosure Real Estate.
(BTW – there is no rule, about placing a real estate sign at a property, when it is not on the market for sale.)