The bank-owned property sale is fairly commonplace these days. The amount of foreclosures in the Carson Valley is unprecedented, and has resulted in a niche real estate market with unique business practices. When a bank owns a property the sale process is different than when dealing with a private party.
The first difference comes when they value the property. They begin before the foreclosure sale by getting a Broker Price Opinion, BPO. After they obtain title to the property via the foreclosure sale they usually order two BPO’s to determine value. After that they select an agent to list the property with and ask that the agent prepare yet another BPO. During this process the property value usually plummets due to the post-foreclosure condition of the property. With one of the first lender actions subsequent to obtaining title being to turn off all utilities causing the value to continue to drop as the landscaping dies.
Most lenders hire an Asset Manager, AM, to handle the sale for them. The Asset Manager orders the BPO’s, prepares the property for sale, hires the listing agent, negotiates the contracts, and sees the escrow through to close. The BPO Listing Agent communicates with only with the Asset Manager, and primarily via computer.
When an offer is presented it isn’t emailed or faxed to the Asset Manager, rather there is a computer menu that the agent completes by checking and filling in the appropriate boxes to reflect the terms and conditions of the offer. There is also an area for notes so the agent can make comments to the AM to provide some perspective about the offer circumstances. Counter Offers are also made via computer. We have actually received an AM Counter Offer at 6:00 p.m. on a Saturday. That is refreshing as it is in keeping with conventional real estate to keep the negotiations flowing. Historically, bank owned property transactions were a M-F/8:00-5:00 operation.
Once accepted the offer and related documents are sent to the AM via email. They are signed and returned with the AM’s special Disclaimer documents (a must-sign, non-negotiable package) for execution by the Buyer, and the escrow is opened. From there it is pretty much business as usual.
Our Advice: The REO sale process has been streamlined since we last wrote about it. The AM’s are more responsive, act quicker, and are willing to engage in “Ping Pong” negotiations until a transaction is put together or it is accepted that it cannot be put together. The AM Seller has no emotion in the transaction – they are just dealing with numbers and circumstances - which can be a benefit to a Buyer making a reasonable offer. The Seller isn’t concerned about their next purchase, their perceived “loss” since the market dropped, or the memories incurred during the course of ownership. Make a good clean offer that highlights your strengths and you can be making the proverbial “scream’n deal” in no time.
REO’s offer a realistic means to make a good deal today. Their historical burdensome processes are now themselves history. Don’t fear the REO – consider the brown lawn a welcome mat to a green return on your investment.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781-5472, carsonvalleyland@hotmail.com, www.carsonvalleyland.com
Showing posts with label REO. Show all posts
Showing posts with label REO. Show all posts
Friday, September 26, 2008
Wednesday, May 21, 2008
We Hear So Much About Being Able To Make A Good Buy Now … How Do We Get One?
What a wonderful yet frustrating time to be a Buyer! There are more properties for sale than there are Buyers. Buyers are being inundated with information and much of it is conflicting. The result is a sense of confusion and frustration among Buyers … “buy now”… but “the market might go lower” …”you should get concessions when you buy”, but there are no guidelines. There are basically four types of properties today: bank owned, foreclosure, preforeclosure/short sale, and owner.
Many homes are being or have been foreclosed on. Buyers are told that this is a good opportunity for making a good buy. Is it? It can be, and, for some, it will be, but for most it will only cause them to become paralyzed with inaction and potentially miss the entire 2008 market of opportunity. Foreclosure opportunities are often misunderstood by Buyers.
A “bank-owned” property is one that has been foreclosed on by the lender, and is commonly referred to as a “REO”, real estate owned. The banks have been reducing their prices enticingly on their REOs, but it can be difficult to make a deal with them. Some wait weeks to respond to your offer while they “shop” your offer – see if they can get a better one from another Buyer. All require that an extensive set of documents be signed by the Buyer which diminish or remove many of the Buyer’s “normal” rights. Some of these are in direct conflict with Nevada consumer protection law. Want a good deal? It had better be a great one and you should know what you are doing as you venture down this path. The results can be rewarding, but we suggest that you have a good Realtor as a guide, have patience, be ready for surprises and frustration, and make sure the goal is a worthy one – the right property at an exceptional price!
A foreclosure property is one that is being sold at the court house steps for lack of payment. Historically these have been a good deal. This can be a good way to buy property if you have the cash to do so, but the reality is that today most foreclosures occur because the Owner is “upside down”, they owe more than they are worth – 30-40% in most cases.
A preforeclosure property is one that is coming up for foreclosure sale – a NOD (Notice of Default) has been filed and it will be sold approximately 120 days thereafter. This is where the opportunity for a short sale comes in if the Owner owes more than what the property is worth. This process can be rewarding if the lender circumstances are right. The Buyer’s risk is less than that of a foreclosure, but the transaction hassle is more than that of a foreclosed property. This, too, takes time and is full of uncertainty. They can be accomplished … with a seasoned agent to guide and advise you.
Surprisingly, some of the best opportunities out there are owners that aren’t upside down, aren’t desperate, have taken care of their property, and are just wanting and willing to move on. They make quick decisions – you won’t have to wait weeks for a maybe answer; the property is in good shape – you won’t have a dead lawn; they will disclose any defects they know about – you don’t have to sign away rights and hope for the best comforted only by your “price victory”. Buying from a motivated owner usually means there are fewer repairs for you to make, a shorter transaction time, no stigmatization of the property, etc. Make an offer to an owner…you might be delightfully surprised, and financially and emotionally rewarded.
Our Advice: It all depends on what your definition of a “good buy” is. Do you want a cheap price or a good value? Talk your situation over with your agent…candidly. Are you willing to deal with the bank’s strong arm tactics and delays to buy a bank owned property? Do you have the cash and patience for a foreclosure sale? Do you have the patience for the hassle and uncertainty of a short sale? Today’s motivated Seller is competing with the foreclosures and short sales…and they know it. You might pay a little bit more for an “Owner Home”, but you well could be ahead when all is said and done. Pick a path and take action.
A perceived “good buy” will vary according to the Buyer. Make a good buy for you and your family according to your goals, objectives, emotions and circumstances. Your happiness is all that matters, and you can make yourself happy in this market! Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com or www.carsonvalleyland.net , 775-781-5472.
Many homes are being or have been foreclosed on. Buyers are told that this is a good opportunity for making a good buy. Is it? It can be, and, for some, it will be, but for most it will only cause them to become paralyzed with inaction and potentially miss the entire 2008 market of opportunity. Foreclosure opportunities are often misunderstood by Buyers.
A “bank-owned” property is one that has been foreclosed on by the lender, and is commonly referred to as a “REO”, real estate owned. The banks have been reducing their prices enticingly on their REOs, but it can be difficult to make a deal with them. Some wait weeks to respond to your offer while they “shop” your offer – see if they can get a better one from another Buyer. All require that an extensive set of documents be signed by the Buyer which diminish or remove many of the Buyer’s “normal” rights. Some of these are in direct conflict with Nevada consumer protection law. Want a good deal? It had better be a great one and you should know what you are doing as you venture down this path. The results can be rewarding, but we suggest that you have a good Realtor as a guide, have patience, be ready for surprises and frustration, and make sure the goal is a worthy one – the right property at an exceptional price!
A foreclosure property is one that is being sold at the court house steps for lack of payment. Historically these have been a good deal. This can be a good way to buy property if you have the cash to do so, but the reality is that today most foreclosures occur because the Owner is “upside down”, they owe more than they are worth – 30-40% in most cases.
A preforeclosure property is one that is coming up for foreclosure sale – a NOD (Notice of Default) has been filed and it will be sold approximately 120 days thereafter. This is where the opportunity for a short sale comes in if the Owner owes more than what the property is worth. This process can be rewarding if the lender circumstances are right. The Buyer’s risk is less than that of a foreclosure, but the transaction hassle is more than that of a foreclosed property. This, too, takes time and is full of uncertainty. They can be accomplished … with a seasoned agent to guide and advise you.
Surprisingly, some of the best opportunities out there are owners that aren’t upside down, aren’t desperate, have taken care of their property, and are just wanting and willing to move on. They make quick decisions – you won’t have to wait weeks for a maybe answer; the property is in good shape – you won’t have a dead lawn; they will disclose any defects they know about – you don’t have to sign away rights and hope for the best comforted only by your “price victory”. Buying from a motivated owner usually means there are fewer repairs for you to make, a shorter transaction time, no stigmatization of the property, etc. Make an offer to an owner…you might be delightfully surprised, and financially and emotionally rewarded.
Our Advice: It all depends on what your definition of a “good buy” is. Do you want a cheap price or a good value? Talk your situation over with your agent…candidly. Are you willing to deal with the bank’s strong arm tactics and delays to buy a bank owned property? Do you have the cash and patience for a foreclosure sale? Do you have the patience for the hassle and uncertainty of a short sale? Today’s motivated Seller is competing with the foreclosures and short sales…and they know it. You might pay a little bit more for an “Owner Home”, but you well could be ahead when all is said and done. Pick a path and take action.
A perceived “good buy” will vary according to the Buyer. Make a good buy for you and your family according to your goals, objectives, emotions and circumstances. Your happiness is all that matters, and you can make yourself happy in this market! Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com or www.carsonvalleyland.net , 775-781-5472.
Wednesday, November 7, 2007
We are ready to buy … how to we get a good deal?
You have asked the question that is stopping many from acting … congratulations and thank you for doing so. Good real estate deals are available, but it takes work and knowledge to find them or to satisfactorily negotiate one. That might seem contradictory to what is the popular opinion of the market, that it’s a Buyer’s Market, but it simply reflects the price resistance of Seller’s. The art of buying “right” today is to determine which suitable property has ownership that is ready, willing and able to sell to you at a price you will pay.
Some good buying opportunities right now are bank owned houses. The banks have good incentive to sell their properties and are usually willing to look at bona fide offers. It takes time and a lot of documentation procedures to keep their legal department happy, but the results can be worthwhile. An example is our recent sale of a home the bank foreclosed on at $299,000, listed for $259,000 and we sold for $253,000 with the bank paying $8,000 of the Buyer’s closing costs. The Buyer made a good deal by taking action.
You and your agent can find bank owned properties from several sources including www.NVHUD.com , www.Forclosure.com , and www.realtytrac.com . The www.NVHUD.com site tracks government loans, ie.- FHA and VA. On most of these you can sign up for notification when new properties are available. Some have a monthly cost for the service. Your agent likely subscribes so you won’t have to.
It is also possible to negotiate a good value with non-bank Sellers. If there is enough equity, and motivation, many Sellers will consider a reasonable offer. It may be less than their lingering hopes, but with the right perspective they will see the benefit of accepting the offer. Agents can help them with perspective, i.e.- how they stack up in the market, what the market is doing where they are moving to, and what may happen if they don’t sell for another six months, etc. so they can make their decision with confidence.
Our Advice: Don’t try to think for the Seller. Only the Sellers know how your offer will affect them, and what the real value of the offer is to them, from their perspective. Many Sellers and their agents hide the true motivation, their real reason for selling. Your offer may free them to continue with their lives, and only a Seller faced with accepting an offer knows what that offer means to him. Taking action is the only way to find out. In the spirit of “Nevada Real Estate”, remember the gaming mantra, “You can’t win if you don’t play!”. Make an offer.
Don’t get hung up on what others think of the market. Consider you, your investment objectives, and how you can achieve them… today. These are challenging, fun, and rewarding times.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com , 775-781-5472.
Some good buying opportunities right now are bank owned houses. The banks have good incentive to sell their properties and are usually willing to look at bona fide offers. It takes time and a lot of documentation procedures to keep their legal department happy, but the results can be worthwhile. An example is our recent sale of a home the bank foreclosed on at $299,000, listed for $259,000 and we sold for $253,000 with the bank paying $8,000 of the Buyer’s closing costs. The Buyer made a good deal by taking action.
You and your agent can find bank owned properties from several sources including www.NVHUD.com , www.Forclosure.com , and www.realtytrac.com . The www.NVHUD.com site tracks government loans, ie.- FHA and VA. On most of these you can sign up for notification when new properties are available. Some have a monthly cost for the service. Your agent likely subscribes so you won’t have to.
It is also possible to negotiate a good value with non-bank Sellers. If there is enough equity, and motivation, many Sellers will consider a reasonable offer. It may be less than their lingering hopes, but with the right perspective they will see the benefit of accepting the offer. Agents can help them with perspective, i.e.- how they stack up in the market, what the market is doing where they are moving to, and what may happen if they don’t sell for another six months, etc. so they can make their decision with confidence.
Our Advice: Don’t try to think for the Seller. Only the Sellers know how your offer will affect them, and what the real value of the offer is to them, from their perspective. Many Sellers and their agents hide the true motivation, their real reason for selling. Your offer may free them to continue with their lives, and only a Seller faced with accepting an offer knows what that offer means to him. Taking action is the only way to find out. In the spirit of “Nevada Real Estate”, remember the gaming mantra, “You can’t win if you don’t play!”. Make an offer.
Don’t get hung up on what others think of the market. Consider you, your investment objectives, and how you can achieve them… today. These are challenging, fun, and rewarding times.
Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, www.carsonvalleyland.com , 775-781-5472.
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