The latest national economic growth numbers should finally put to rest fears of a recession that could choke the real estate recovery now getting underway.
Excerpt from:
Real Estate Outlook: Recession Fears Put to Rest
As real estate agents, we all want to succeed. That’s a given. But often we’re so close to the daily grind of our work that we don’t know where we are in our careers.
Excerpt from:
The Three Levels of a Real Estate Agent’s Career
The “powers that be” seem intent on statistical manipulations to prove we are not in a recession. Smart consumers will ignore these financial semantics and tackle the “R”-word head on.
Source:
Start Acting “Recession” to Escape the Worst
Modern day modular homes are discrediting the industry’s stereotype as blah cookie-cutter homes sold off a lot and images of double-wide trailers taking up the interstate. Forget safe, neutral colored Formica and standard finishes. These pre-fabulous homes can feature kitchens with bold black granite countertops, colorful glass mosaic backsplashes, stainless steel appliances and bamboo flooring.
Read the rest here:
From Pre-Drab to Pre-Fab
In any real estate market, a house that shows well and is in good condition is going to outshine the
competition. Now factor in a market with a shift from a few years ago - increase in supply and decrease in demand. How do you stay in the game and eke ahead of the competition when you are selling a house?
You need to dress your house for success.
Dressing your house for success doesn’t have to mean pouring thousands of dollars into your dwelling. If you have kept up on routine maintenance - i.e., roof repairs, furnace cleanings and A/C inspections, you are ahead of the game. This “Sunday best” outfit is called staging, and market-savvy real estate agents use staging to get their clients’ houses sold, or hire professional stagers to stage their clients’ houses for them.
The practice of home staging means getting your house in show-ready shape. When done correctly, it allows buyers to walk through a house and envision it as their home. If buyers cannot visualize their belongings in your house, then they will not consider it as an option for them.
It’s really that simple.
“First appearance is everything to a buyer”
There are simple changes any homeowner can make. De-cluttering is key. Get a storage unit to put your furniture in so buyers are able to truly view their surroundings. Your house also needs to be sparkling clean. “Broom clean” condition isn’t good enough anymore.
You should paint your house in neutral
colors - off-white or taupe. Neutralization helps people see themselves in the house. The style these days isn’t as color-coordinated as it used to be and gone are the days of just white walls.
Personalization can be a tricky thing when it comes to staging a house. It’s OK to leave a few family photos up, but you don’t want walls of murals dedicated to your family pictures.
Buyers just don’t want to see that.
Don’t forget to work on your house’s curb appeal. A buyer’s first impression starts as soon as they drive up to a house:
The last bit of advice when staging your house? Remember to look through your house as if you were a potential buyer. Another tip to remember: If you have any personal effects lying around, it’s best to tuck those away in cabinets and drawers. More than a few times, a buyer has viewed something better left private - even the bathroom of a house is viewed with discerning eyes.
Posted by Rebecca D. Levinson
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Selling a house? Home staging dresses your house for success
The choices can be overwhelming in a real estate market saturated with inventory. REO properties and short 
sales - added to new construction and regular resale properties - make an interesting potluck for real estate buyers. If you are diligent, there are many great real estate buys across the United States today.
Most importantly, if you are realistic, you can hit a bullseye in real estate.
I spoke with Connect2Agent member and real estate agent in Scottsdale Arizona, Jan Green, about the multiple housing options buyers have to choose from. Similar to a multiple choice test, there is usually one right answer. Unlike that popular testing method, the right answer changes for each real estate buyer.
While a buyer’s final answer results in a big financial commitment, the reasons for the commitment are personal.
In the Phoenix area, variety is the spice of the real estate market. Buyers are able to choose from a mix of resale, REO (real estate owned) and short sale properties. The majority of the houses on the market right now are ones that are nearing or already in foreclosure.
Four hundred foreclosure properties typically come on the market in a day in Phoenix. Green says it is her job to pick the best ones for her clients - not an easy task. She shared with me that some foreclosures have pools that have not been maintained. These become cesspools for mosquitoes and their larvae.
Other foreclosure properties have been left in varying stages of disrepair, from unsightly yards and dirty interiors to more pressing problems, like water damage due to a burst pipe that’s been leaking and left neglected. Vandalism can also be a common occurrence for REO properties. Green has seen houses where built-in speakers have been ripped out of the walls and the interiors have been gutted of valuables and spray painted.
Green tours many REOs in order to find the ones left unscathed by neglect and abuse. The ones that remain are true diamonds in the rough.
Next are the short sales. These houses are still with the original owner, but are nearing foreclosure. Because the sellers of these houses have fallen behind in their payments and owe more than what they can list the house for, the banks have to agree to the final sales price negotiated between the owner and a real estate buyer.
The short sale process is not for the faint of heart. It can be long and problematic. Green does not recommend short sales to many real estate buyers for this reason. They take longer to close and the deal can go from desk to desk in the loss mitigation department. It is difficult to keep the communication efficient and consistent. The time from contract to closing can be months and in between that time, the deal can fall apart.
Finally, you have the resale and new construction houses. They may not be the cheapest houses for sale in the Phoenix real estate market, but some are aggressively priced to keep up with the abundance of REO properties and short sales. Sellers and builders alike might offer incentives, like free upgrades and closing cost assistance, to tempt home buyers.
The resale and new construction properties are the best-maintained properties in the market today.
Each type of housing has its own flavor. At the end of the day, how do you know where to find the 
bullseye? I asked Green - who has recently assisted four first-time home buyers in a row - this question. One of the first-time home buyers purchased new construction and the other three purchased REO properties. She broke it down to three questions home buyers need to ask themselves:
Answer these questions and share your hopes and dreams with your real estate agent. This is where the impartial party can step in and give you the guidance you need. Then step back, adjust your stance, aim and throw … you can hit the bullseye in real estate.
Posted by Rebecca D. Levinson
Here is the original:
How to hit the bullseye in real estate
In a world full of DIY (Do-It-Yourself) stores and TV shows, real estate might seem like a natural fit for the independent crowd. Unlike installing new flooring or painting a faux finish, a real estate transaction involves a hang-tough attitude. Homeowners have to be impartial in what are very personal transactions.
This is near next to impossible if you are purchasing a primary or second home residence.
Still, every year thousands of homeowners try to list their house as a FSBO (For Sale By Owner). Many more end up emptying their gas tanks sooner than expected and having a real estate agent take over their listing.
There are many reasons why the FSBO route fails. Here are the 3 top pitfalls of a FSBO real estate transaction.
Pitfall #1: Less money for your efforts
Try, try again seems to be the rally cry for FSBOs. Many homeowners who choose to sell their house on their own do so because they feel they will gain more money. Statistics speak otherwise. In 2007, the National Association of Realtors found ” … the typical FSBO home sold for $187,200 compared to $247,000 for agent-assisted home sales.”
In this scenario, even at a six percent sales commission, the homeowner still walks away with $232,180 - nearly $45,000 more than what they make selling on their own.
Pitfall #2: You have to contract yourself to work full-time to get your house sold
Marketing your house is a full-time job. I spoke with David Walls, Connect2Agent member and real estate agent in Knoxville, about marketing a seller’s house. His number one method of drawing home buyers to a property is holding an open house.
Walls also uses the Internet. Both the Internet and open houses have drawn good results for him. Comparing Walls’ marketing methods to the National Association of Realtors marketing statistics for FSBO sellers was startling. I found only 25 percent of FSBO sellers use open houses to market their properties.
The most shocking marketing statistic was that only 21 percent of FSBO sellers list their house on the Internet.
Pitfall #3: There is no buffer zone between you and home buyers
You are the numero uno go-to guy in a FSBO sale. If a home buyer wants to see your house, you are the one
who schedules the showing. If a home buyer comes in with a lowball offer, you are the one who needs to negotiate the offer. If your advertising deadline is coming up in the local paper, you need to make sure you get all your photos and your ad description so it will make the print time.
To break it down to the heart of the matter, Walls had this to say on the subject of FSBO sellers: “Why would you want to deal with all the showings, advertising, strangers and phone calls when you can have it done and have it done effectively? How many calls do you want to handle a day and who do you want coming to your door?”
In the end, FSBO sellers might find themselves ensnared in a worse trap by selling on their own than they had envisioned. Homeowners can maintain control of the sale of their house when they list with a real estate agent. They need to set the expectations up front and communicate effectively.
Walls has experience in working with real estate sellers who decide to list with him and drop their DIY ways. He says in most cases when he presents his services to a homeowner, he gets the real estate listing because he is prepared and because they are on the same wavelength in terms of price and the property.
If a homeowner has problems with the job Walls is doing selling their house, he encourages them to call or write him. If the problems are still not resolved, Walls gives the homeowner the option of cancelling the listing with him.
Given that nearly 75 percent of FSBO sellers end up listing their house with a real estate agent, a homeowner’s time might be better spent interviewing the right real estate professional for the job.
Posted by Rebecca D. Levinson
Here is the original:
The 3 top pitfalls of a FSBO real estate transaction
Hats off to Paul Dunn, an FHA mortgage loan specialist located in Oro Valley Arizona, whose blog post,
“Help Save Downpayment Assistance-Join La Resistance”, opened my eyes to the fact that with the signing of the Housing and Economic Recovery Act of 2008 also comes the official elimination of downpayment assistance.
Unless there is a swift response, downpayment assistance will go down the drain October 1st.
Enter “DPA Groundswell”, a campaign to stop the elimination of downpayment assistance. This campaign is supported by The Congressional Black Caucaus, The United States Hispanic Chamber of Commerce, The Mortgage Bankers Association, The National Association of Home Builders and many other organizations. They believe the home buying pool will dwindle even further if downpayment assistance is eliminated.They are asking the public to support HR 6694 - the FHA Seller-Financed Downpayment Reform and Risk-Based Pricing Authorization Act of 2008 - which would keep downpayment assistance alive and well.
Why all the ruckus? FHA loans are a popular form of financing for middle-income and first-time home buyers. FHA requires a minimum downpayment for buyers - three percent. In the past, sellers were able to help contribute to the buyer’s downpayment in the form of a credit of closing costs, or a buyer could use a downpayment assistance like Nehemiah or Ameridream.
Elimination of downpayment assistance will delay or completely shut out a number of real estate buyers from being able to afford to buy a house.
Where do you stand when it comes to the elimination of downpayment assistance? For or against? Connect2Agent would like to hear your opinion … raise your voice by commenting below.
Posted by Rebecca D. Levinson
Excerpted from:
Downpayment assistance goes down the drain October 1st
The real estate industry changes with every new cycle, and sometimes even sooner. The good news is that if you pay attention and are willing to learn from your mistakes or those of others, you will gain a new understanding and be able to take advantage of great opportunities.
You can become the Brock Lesnar of real estate.
It’s the new reality of real estate. Mortgage companies want to see that buyers have a good downpayment, a
stable income - and a paper trail for proof. It’s not commonplace anymore for a seller to receive multiple offers on their house. Homeowners across the United States should not expect year after year of double-digit appreciation.
Moderation is the buzz word and caution seems to be a guiding principle.
Real estate professionals have been given a breather. They have been able to take a step back and evaluate their business model. They are looking to see what is bringing in the best results for their
business; hence, their clients.
If real estate agents view the practice of real estate as an entrepreneurial endeavor, they are giving themselves a talking-to and taking time to build up new skills. They are evaluating their foundation honestly and seeing if they’ve got any cracks that need to be examined.
It’s what they call transparency and it starts with a self-assessment.
I recently spoke with Roy Aronds, a Connect2Agent member and real estate agent in Carson City Nevada. We discussed the adjustments he’s made to his business and the changes in his local market.
The Internet (Web 2.0), REOs, and changes in mortgage qualifications all play a significant role in Aronds’ real estate business.
Aronds considers himself fairly new to the real estate industry. In the five years that he has been selling real estate in Carson City, he’s already had to change and learn new skillls and adapt to the new real estate reality.
Foreclosures used to be a rarity in Carson City, Aronds informed me. “I’ve had to make a change with the times.” He’s now been studying foreclosures and informed me there are ways to help save people from a foreclosure. Options include short sales and refinancing with government-tailored mortgage programs. There are different types of refinancing options available if you know where to look.
Knowledge is power.
Even though there has been an increase in REO and short sale properties in Carson City, “Housing prices have dropped to a point where buyers are purchasing,” Aronds said. REO properties are not in the same disrepair as in some of the other cities around the country. In Carson City, houses that are boarded up and totally trashed are not common.
Buyers have an opportunity to get a good deal with these properties because the banks are interested in getting them off their books and selling them. But buyers shouldn’t be confused with banks’ intent to sell and mistake it for desperation to sell.
Real estate buyers should be able to get a good deal, but they won’t be stealing anything from the bank.
Aside from Aronds’ constant market observations and studies, what else has he done to keep his business alive? He’s placed an emphasis on marketing his business online. Aronds believes the Internet is an integral part of the real estate industry today. Consumers can go online, search house values, look at listings and get a general feel for the area where they are looking to puchase a house.
Enough buyers are online that Aronds hopes when they are ready to make contact, he will be the real estate agent they choose to work with.
A large number of Aronds’ clients are currently coming from the Internet. He may feel he’s a newbie, but his adoption of the new reality of real estate is what will keep his business going. To others who are hesitant to step into the arena, I’ve only got one thing to say:
“Adjust to the market or go ahead and tap out.”
Posted by Rebecca D. Levinson
Go here to see the original:
You can become the Brock Lesnar of real estate
If you are selling a house in a market saturated by REO (bank owned) and short sales, it’s time to take a look in the mirror and make a choice. The choice you are making is how serious you are about selling your house. Do you need to sell your house today or are you listing it ”just to see what you can get?” If it is the latter, you might want to reconsider your choice to list your house. If it’s the former, roll up your sleeves–I have some action items for you.
Selling a house isn’t easy, but it can be easier depending on your level of commitment and cooperation. In a market where your main competition is REO and short sale properties, you need to:
Now it’s time for a self-evaluation check. Do you still want to sell your house? Do the above action items seem reasonable to you? If you’ve answered yes, then one last question: Are you expecting top dollar? Now, if you answered no, go ahead and move on to the next section of this post. If you answered yes, it may be time for some more self-evaluation before moving ahead. Denial is a hard habit to break.
If you’re still here, that’s great. You have taken a big step and made a decision to be a realistic real estate seller. Having sold a house before, I know it’s not always an easy move to make. Now that we have that difficult part out of the way, let’s move on.
Not all real estate sellers are on an equal playing field. Some who are transferring jobs or who are near foreclosure don’t have the luxury of time. In addition to following the above tips, make sure you choose a real estate agent who has sold properties like yours and who communicates frequently and effectively.
Email, phone and text messaging should all be skills your agent possesses.
Don’t base your real estate agent selection solely on price. Real estate agents who buckle on their price opinion and agree to list at the price you want, simply to “get the listing,” might be doing you a disservice in the long run.
The longer your house sits on the real estate market at an inflated price, the harder it will be to get it sold.
Finally, let me touch on marketing. Your real estate agent needs to present you with a rock-solid marketing plan. The majority of the marketing plan should concentrate on marketing your house online. Networking to other real estate brokerages, agents and past clients should be a close second. Third should be newspaper advertising, post cards and open houses.
All of these action items are critical to getting your house sold. Ask yourself this question: Is my house listed right now with a dead-set intention to sell it? If your answer is yes, then make a firm commitment to step it up. You’ll need to if your real estate market is saturated with REO and short sale properties.
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Posted by Rebecca D. Levinson
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How to step it up and compete against short sale and foreclosure properties
How many home buyers will still be sitting on the fence after learning about the new $7500 tax 
credit for first-time home buyers? After President Bush’s previous hesitancy to endorse widespread government bailout of the foreclosure and housing crunch, it seems his pen is in full-on signing mode these days.
First it was raising FHA loan limits, then the housing bill to help homeowners escape foreclosure, and now a housing bill aimed to help first-time home buyers who are in need of cash–$7500 worth of cash. The bill is meant to provide a catalyst in the sluggish housing market by giving buyers incentive to act now. There is a time window–in order to get the credit, you have to buy a house between April 9, 2008 and July 1, 2009.
Free money? Hardly. If you want to play, you will need to pay. The government will allow you up to 15 years to pay back the $7500, free of interest. The first payment will be due two years from when you receive the credit.
Will this help to speed up the recovery of the housing market? 52 Lee Street wants to hear your thoughts. Chime in by commenting below.
Posted by Rebecca D. Levinson
Is a short sale a good option for a home seller looking to escape foreclosure? The answer is an undeniable yes. Is it a good move for a real estate buyer? The answer to this question depends on who you are talking to and what real estate market you are in.
Some real estate agents work the short sale market as their niche. They learn the ins and out of working with the banks and getting approval from them. The process is similar with every transaction, but each bank has different people behind desks making decisions. Even more complicated is that each bank has different departments–legal and loss mitigation–working on the short sale process and seemingly not working in conjuction with each other.
As a homeowner, you need a real estate agent who specializes in short sales to make sure you are as timely and effective as possible with the banks. As a real estate buyer, you need an agent who specializes in short sales to guide you to the better deals and to be your support staff through the excruciatingly long process of acceptance.
Tanya Endicott, a Connect2Agent member and real estate agent in North Dallas, is a true-blue short sales guru. She’s been selling real estate in North Dallas for the past eight years and has specialized in REOs and short sales. Short sales are a good situation for homeowners who are upside down on their house, says Endicott.
In this situation, the banks are more inclined to work with a homeowner. Homeowners need to work with their real estate agent and get all the proper documentation to the bank. The process is the same for all banks, Endicott informed me.
It is really a matter of being steadfast in getting the right paperwork to the bank and having a real estate agent make sure the communication happens to both the loss mitigation and the legal departments at the bank. Although these two departments are in the same bank, they often don’t talk to each other.
Even the most extreme situations can work out successfully. Endicott shared a story about a client who had three strikes against her and still was able to come out OK: Her client’s daughter had expensive back surgery. Then the client herself had costly back surgery. The final strike was the tenants in her rental properties stopped paying rent.
Endicott was able to renegotiate the mortgage terms on one of the houses, and it’s currently listed. Another of the houses closed in escrow on July 28.
For buyers, short sale transactions can be a roller coaster ride. They need to have patience because the process is so long. Even when the homeowner and the buyer settle on a sales price, the bank still has to approve it.
Endicott takes pride in being able to close 8 out of 10 short sale transactions. She informed me this is a high closing ratio for the marketplace. Many real estate agents, she estimates, may have 1 in 10 short sale transactions go through.
Can you be a homeowner again after you have closed your house on a short sale? The dream of homeownership is not lost for these homeowners. Endicott informed me it is “Free for people to do a short sale and in most instances, it doesn’t impact your credit.” If you go past 30 days paying on your mortgage, it will still go on your credit, but you can work on credit repair after your short sale transaction.
How do you find a real estate agent who specializes in short sales properties? This seems to be the million-dollar question. Endicott recommended a seller’s best avenue might be to Google “short sales” and take some time to read up on what kind of advice a real estate agent might give you.
As always, when it’s time for you to choose a real estate agent to work with, make sure you ask questions like:
The success of a short sale transaction can begin and end with your real estate agent’s expertise.
Posted by Rebecca D. Levinson
Is a short sale a good option for a home seller looking to escape foreclosure? The answer is an
undeniable yes. Is it a good move for a real estate buyer? The answer to this question depends on who you are talking to and what real estate market you are in.
Some real estate agents work the short sale market as their niche. They learn the ins and out of working with the banks and getting approval from them. The process is similar with every transaction, but each bank has different people behind desks making decisions. Even more complicated is that each bank has different departments–legal and loss mitigation–working on the short sale process and seemingly not working in conjunction with each other.
As a homeowner, you need a real estate agent who specializes in short sales to make sure you are as timely and effective as possible with the banks. As a real estate buyer, you need an agent who specializes in short sales to guide you to the better deals and to be your support staff through the excruciatingly long process of acceptance.
Tanya Endicott, a Connect2Agent member and real estate agent in North Dallas, is a true-blue short sales guru. She’s been selling real estate in North Dallas for the past eight years and has specialized in REOs and short sales. Short sales are a good situation for homeowners who are upside down on their house, says Endicott.
In this situation, the banks are more inclined to work with a homeowner. Homeowners need to work with their real estate agent and get all the proper documentation to the bank. The process is the same for all banks, Endicott informed me.
It’s a matter of being steadfast in getting the right paperwork to the bank and having a real estate
agent make sure the communication happens to both the loss mitigation and the legal departments at the bank. Although these two departments are in the same bank, they often don’t talk to each other.
Even the most extreme situations can work out successfully. Endicott shared a story about a client who had three strikes against her and still was able to come out OK: Her client’s daughter had expensive back surgery. Then the client herself had costly back surgery. The final strike was the tenants in her rental properties stopped paying rent. Endicott was able to renegotiate the mortgage terms on one of the houses. It’s currently listed.
Another of the houses closed in escrow on July 28.
For buyers, short sale transactions can be a roller coaster ride. They need to have patience because the process is so long. Even when the homeowner and the buyer settle on a sales price, the bank still has to approve it.
Endicott takes pride in being able to close 8 out of 10 short sale transactions. She informed me this is a high closing ratio for the marketplace. Many real estate agents, she estimates, may have 1 in 10 short sale transactions go through.
Can you be a homeowner again after you have closed your house on a short sale? The dream of homeownership is not lost for these homeowners. Endicott informed me it is “Free for people to do a short sale and in most instances, it doesn’t impact your credit.” If you go past 30 days paying on your mortgage, it will still go on your credit, but you can work on credit repair after your short sale transaction.
How do you find a real estate agent who specializes in short sales properties? This seems to be the million-dollar question. Endicott recommended a seller’s best avenue might be to Google “short sales” and take some time to read up on what kind of advice a real estate agent might give you.
When it’s time for you to choose a real estate agent to work with, make sure you ask questions like:
The success of a short sale transaction can begin and end with your real estate agent’s expertise.
Posted by Rebecca D. Levinson
It is human nature to want more than you have today? The desire for more isn’t a problem, but the habit of going full-tilt is, when it means extending yourself beyond your current means.
Sounds simple, right? If it’s so simple, then how come there aren’t many good examples to turn to? Look at our national debt and credit card craze. Even Hollywood stars who have had the cash have spent beyond their means. A close call on the Neverland Ranch earlier this year is proof in the pudding. Meanwhile, some stars haven’t been as lucky.
Enter Kathie Anderson, a Connect2Agent member and real estate agent in Libertyville Illinois, who has worked in the real estate industry for 33 years. Anderson recognized a change in the tide of real estate two years ago. Not only a real estate agent, but a homeowner, she decided to sell her house while she could still profit from it. She did just that and purchased a townhouse.
Anderson downsized her house to save her lifestyle.
Looking back, Anderson has no regrets about her decision. Real estate certainly took the tumble that she had anticipated and as a result, many real estate agents selling in the Libertyville Illinois real estate market left the business.
Many people just didn’t have the financial means to weather a slower real estate market.
Currently, there is eight months’ worth of inventory on the real estate market in Libertyville Illinois. Anderson advises homeowners in her local market not to sell unless they really need to. She tells them, “Let’s just wait and see what happens.” Homeowners who do have to sell need to have their house in the best condition it can be, at the lowest price it can be.
They will be competing against REO and short sale properties.
Why the abundance of REO and short sale properties? Because of that supersized lifestyle–the lifestyle that allowed consumers to refinance and take out the equity in their houses, and then use that money to buy things like cars and boats, which lost value on the day of purchase. The lifestyle that allowed people to get interest-only loans to purchase houses they couldn’t otherwise afford.
Sometimes our appetites are bigger than our wallets.
Does that mean people shouldn’t buy real estate right now? Anderson doesn’t think so. She informed me the time is right for a buyer who has saved for a downpayment and has worked on their credit. You won’t be able to get 100 percent financing, but you can get an FHA loan with a 3 percent downpayment.
Any there any rewards for being especially dollar-savvy? Anderson says if you have saved 20 percent down, the Libertyville real estate market is your oyster, with literally hundreds of choices to accommodate your needs and desired lifestyle.
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Posted by Rebecca D. Levinson
Do foreclosures seem to be muddying the waters of your local real estate market? Have you been thinking about buying a house, but are leery of making a move toward these REO (bank owned) properties for fear of having your investment crash in around you?
Not all foreclosures are alike. They don’t all come with boarded up windows and 5-foot, sky-high weeds and grass. Many serious deficiencies with a bank-owned property have to be repaired in order for the bank to sell it. It is a bank’s goal to get these houses sold, not keep them on the books to eat a bigger hole in their balance sheets.
Is your appetite hungry for more information about foreclosures? I might have just the entree you are craving. I recently spoke with Andrew Capuano, a Connect2Agent member and real estate agent who sells Fairfax County real estate. Capuano migrated his business to specialize in REO properties and lended some great insight into the foreclosure market.
Read on and learn more. Carpe diem–Forclosures can be a great deal for real estate buyers.
Some people conceive that foreclosures are the worst kind of properties. Images of boarded-up windows and dilapidated buildings come to mind. Is this the case with all foreclosures? In the bank-owned world, there are all sorts of properties that get foreclosed on and become REOs.
Capuano informed me that in the Fairfax County real estate market, you can find some foreclosures that are new, beautiful properties. You can also find some that are really awful. They have mold and are considered “contractor’s homes.” Some of the foreclosures in the worst condition are not able to be financed.
A real estate buyer’s best bet is to pick a house in good condition. There’s no need to waste your time with bad houses. You can still get a good deal on the ones that are in good shape. In northern Virginia, Washington D.C., Loudoun and Prince William counties, the REO and new houses are the ones that are moving.
Consumers have realized they can get a good deal on these properties. According to Capuano, “REO properties are the best deals on the market in Fairfax County by far. Resales are lowering their list price enough to compete with these properties.”
Is it OK to make a low ball offer on a REO property? That is different for every single foreclosure. A real estate agent who is knowledgeable of REO properties will know whether your offer is still within reason, based on the listing and the house.
Real estate agents who specialize in REOs should be able to provide comparable properties to the one you are bidding on that can support your low offer. Otherwise, it is probably not a good idea. Banks aren’t giving away houses. A prime example is a house that Capuano’s clients bought in Fairfax County. The property was in Virginia Oaks, a golf course community.
The REO property had been listed at $530,000 for a year. Capuano’s client really wanted the house; it had some attractive features like a pond view in the rear and front and it was also located off the driving range. His client made an offer of $430,000 and requested 3 percent closing concessions from the bank. Capuano sent the data to support his client’s offer and the bank accepted it.
REO properties can become a hot commodity if real estate buyers in a market start to pick up on the deals they can get. In the Fairfax County area, some REO properties are being listed below their market value to instigate bidding wars–and it’s working. The good news, according to Capuano, is that real estate buyers are still buying at 30 to 40 percent less (sometimes amounting to as much as $100,000 to $200,000 less) than they would have two years ago.
The last thing to remember when you are considering buying a foreclosed house? Work with a real estate agent who has made REO properties their niche. A real estate agent who is a foreclosure expert will be able to weed through the Multiple Listing Service and find the bank-owned properties. Those expert agents will be able to help you make a good offer and get you through the nuances of negotiating an REO property.
How do you find a local foreclosure expert? Ask the real estate agents you interview how many Real Estate Owned properties they have sold in the last three months. You can also call a real estate brokerage and ask the broker/office manager to recommend a real estate agent who specializes in REO properties.
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Posted by Rebecca D. Levinson
