Buying foreclosures, REO and bank owned properties in Contra Costa

Did you know that in a recent look at our market, it was determined that bank owned property median listing prices are as much as 24% LOWER than the median home price?  Take a look at this chart from Trulia:

 http://images.trulia.com/resources/Trulia_Trends_Report-February_2008.pdf

 I had a seller not long ago wanting to sell in the range of 450k.  The comps in the area told us 450k was a good price.  But then came two bank owned properties on the same street!  One at 375k and one at 359k.   How does a “regular” seller compete with that?  Unless the homes are total junkers, and sometimes they are, why would a buyer pay so much more for the “regular” seller house?  Well the answer is, they won’t.  Sellers are really having to get aggressive with their listing prices, and they’re going down.  Our trend reports are showing that most of our areas are having median home price drops of anywhere from 2-10% month over month. 

For buyers, what a perfect scenerio.  For the short sale listings I list, when we price aggressively, we’re getting multiple offers on almost all of them.  So perhaps a “tipping point” is coming.  Investors will come out.  First time buyers will start to follow suit, and soon we’ll have some brisk sales to report.  Its said that when they’re is blood in the water, the sharks come out.  Well the folks looking for the “deals” are coming out.. shouldn’t you ?

Contact Catherine Myers, REALTOR
Accredited Buyer Representative

http://www.DiabloValley.net

http://contracostashortsales.wordpress.com

925-683-2125

Serving home buyers, investors and sharks in Contra Costa County and parts of Alameda:

Walnut Creek
Pleasant Hill
Martinez
Pacheco
Lafayette
Alamo
Orinda
Moraga
Danville
Concord
Clayton
San Ramon
Pleasanton
Livermore
Antioch
Brentwood

Here are some listings / homes for sale you may be interested in.  Some are short sales and in the pre-foreclosure process, others are just all around good opportunities. Contact me for more information.

Pre-Foreclosure Properties

2141 No Donovan Way, San Ramon / 4 bedroom, 2.5 bath $665,000

636 Filbert Ct, San Ramon / 3 bedroom, 2 bath COMING SOON

1789 Tice Valley Rd, Walnut Creek / 2 bedroom, 2.5 bath $450,000

4621 Shannondale Drive, Antioch / 4 bedroom, 2.5 bath $350,000

1149 Victory Lane, Concord/ 2 bedroom, 1.5 bath $298,000

2455 Carpinteria Drive, Antioch / 4 bedroom, 3 bath $298,000

 2716 Oak Road, Walnut Creek / 1 bedroom, 1 bath $210,000

1067 Mohr Lane, Concord / 2 bedroom, 1.5 bath $148,000

1053 Mohr Lane, Concord / 2 bedroom, 1.5 bath $148,000

 Also available, but not short sales or distressed:

293 Foulkstone Way, Vallejo / 4 bedroom, 3 bath $580,000

2412 Geraldine Drive, Pleasant Hill / 3+ bedroom, 2.5 bath $550,000

3678 Joan Avenue, Concord / 3 bedroom, 2.5 bath $439,900

1336 Viva Lane, Concord / 3 bedroom, 1 bath $389,000

Plus two mobile homes:

Pacheco / 2 bedroom, 2 bath $95,000

Pacheco / 2 bedroom, 2 bath $79,900

So you want to buy a foreclosure? There is a lot of opportunity out there, but there are some things you need to know in buying a bank owned property.  This new blog will be all about the strategies, challenges and reward of buying bank owned properties. 

First, what is a bank owned property? Bank owned properties are also known as REO ’s.  REO stands for “real estate owned.”  Banks have “REO Departments” to manage their real estate. Bank owned properties have been taken back from the homeowners in a foreclosure action.

Buying a short sale or a foreclosure? There are some advantages to buying a short sale.  The biggest is that you should receive full disclosure from the seller.  The seller in a short sale is required to complete all the typical and required disclosures.  A bank does not have to adhere to those same rules.  The bank typically just has to provide statutorily required documents i.e. lead based paint, smoke detector and water heater compliance, etc.  They do have to disclose what they know, but often that is little to nothing.  They’ve never lived in the house, so remember, you need to be extra diligent in buying a house with no history relayed.  Another advantage of buying short sale over a foreclosure might be that in a short sale, the homeowners are frequently still living in, and taking care of, the home. 

There is extra waiting involved.  Yes, a bank has its own process, and its own ‘red tape’.  Currently, many banks need up to 10 days or 2 weeks to respond to your offer.  They may come back with a counter offer, or they may accept, but almost always they will have their own addendums and attachments. You MUST read and understand these.

Everything is negotiable. The bank may play hard ball up front with lots of language denoting ‘as-is’ sale only, etc. etc.  But you have to remember, it is all a negotiation.  They want the house sold.  What can you do to make it attractive for the bank to make some repairs for you, or to pay some closing costs for you?  Have a skilled agent on your side. Its very important to know what to fight for.  

Everything is different.  Not always but often, when you submit an offer, you may get a verbal negotiation vs. a signed contract or counter.  Sometimes they throw away your counter offers or addenda and replace them with their own.  Sometimes its days or a couple of weeks between the verbal “ok we have a deal,” and the signed deal. Be patient and diligent.

Get your loan approved and ready to go.  Even a bank, and maybe especially the bank, is going to scrutinize your ability to perform on the contract you’ve written.  Many banks will require you are pre-approved with them too.  It doesn’t mean you have to use them, but they may want you to get approved by running your credit and completing a quick application. 

Remember, this is not a “person.”  Yes, there is a person at the other end of the contract, but its an employee.  You likely won’t be able to appeal to any emotion, nor even reason.  Its all business, its a contract, and you have to think of it a little differently than you would a regular sale with a seller sitting at his kitchen table. 

Back to the timing.  As mentioned above, this is a bank, with employees.  Often the listing agents aren’t even dealing with the same person consistently.  Often, many decisions require more than one approval. So be patient. If you put in a request for a change, an extension or a credit, it may take some time before you hear back. 

Inspect! Inspect! Many bank owned properties are in disrepair.  Sometimes it is due to poor homeowner maintenance during the foreclosure process.  It can take MONTHS to foreclosure on a property and in the meantime, if the homeowner has no money to make payments, they often are not maintaining the property either.  Then, it can take weeks or months to assign the property out to an agent and get it listed for sale.  It could be vacant for quite a while before you even see it.  BE SURE to get a qualified and competent inspector to look out for your best interests.  Inspections may include: home, chimney, fireplace, foundation, structural, roof, drainage, swimming pool, spa, etc.  Ask your agent for trusted referrals.  Remember, banks often won’t provide you any inspections. You may have to pay out of pocket -but its a small price to pay.  (oh and be sure you know who’s responsible for assuring utilities are on at the house!)

BEWARE!  Beware of auctions.  Beware of the get rich quick schemes.  Now is not the time for flipping properties in most areas.  You need to have expert counsel if you are considering property flipping in the short term, or buying a home yourself at auction. Check out a post about this very topic on my other blog: Better Know What You’re Doing  Don’t get wrapped up in the public auctions held at hotels, etc.  KNOW the areas you are interested in buying, research and know what the high price SHOULD be. 

So are you ready to explore investing in a foreclosure? Its an exploding market now, and there are bank owned properties for sale in every town in Contra Costa.  If you’re ready to go, contact me, I’m happy to get you set with a local lender to get you pre-approved and begin your journey to homeownership.

Catherine Myers
Certified Residential Specialist
Contra Costa Real Estate and Homes for Sale
925-683-2125

Let me know what AREAS and what PRICE RANGE you are interested in, and I can send you customized results for your home search.  I can help in Central and East Contra Costa including Walnut Creek, Concord, Pleasant Hill, Clayton, Martinez, Lafayette, Orinda, Alamo, Danville, San Ramon, Antioch, Brentwood, Pittsburg and surrounding areas.