A little about buying REOs. True investors know that working with banks can be at best tedious and at worst disastrous. They are NOT for the buyer who has to be in a home quickly, and they are NOT for the buyer who wants all repairs made and costs paid etc… You must remember that banks are usually losing money on these homes and want to loose as little as possible. Is that their problem? Absolutely. However, once you have made an offer on their property, they know that you’re interested. The bottom line is they can be very tough to negotiate with and take experience.
I bring this up because it seems that on a daily basis I get buyers asking me about buying foreclosures. Most of them really have no idea what they’re getting into. You need to have money in the bank for unexpected repairs, unpaid HOA dues etc… A buyer is sometimes able to negotiate a better deal with a regular seller because they know the market is tough and have been told by their agent that they need to be realistic. I know, right now you are probably saying, “but the bank doesn’t want to own real estate”. True, but the banks credit won’t be severely hit due to a foreclosure and the amount of times I have seen a bank turn down a reasonable offer is astounding. Remember the person/s negotiating for the bank has no personal interest in the home and doesn’t truly care if the deal works out or not. I’ve seen many offers turned down, only for the home to be sold at auction for much much less than the offers would have recovered for the bank. Sounds like the banks are being kind of dumb right? Right! Unfortunately though this is what occurs on a daily basis. Remember we’re only talking about buyers who are paying cash, if you are getting a loan to buy this property it opens up a whole new world of issues. Still, with all that’s been said here, these deals can be done. All I am trying to do is give a friendly word of caution, REOs are not for everyone. Remember one thing your mother probably told you; ”if it looks to good to be true, it probably is.” Happy hunting!
This is an article from Business Day that I thought should be re-distributed to everyone so that you can make up your mind about Fannie mae on your own.
Fannie Mae says its loss widened to $74.4 billion in 2009 from $59.8 billion in 2008, and it expects the pain to continue this year due to rising unemployment and the cost of implementing the Obama administration’s foreclosure relief initiatives. The company also indicates in its earnings report that it needs another $15.3 billion in federal assistance, which would increase the total amount of its government lifeline to date to $76.2 billion. The cash infusion is key to its solvency and its ability to avoid the appointment of a receiver, according to Fannie Mae.
Broker / Salesman
Once again I find that we are getting a lot of questions about short sales. Most of these questions seem to be about time issues i. e. How long does it take to get an answer from the sellers bank? How long until the deal will be finally done? etc..
The truth lies somewhere between, “I have no idea,” and “possibly before the next millennium.” Some agents including myself have teamed up with different “Short Sale Processors” who seem to have better luck in getting the deal closed. Not necessarily faster, just in getting them approved. The main reason for this is their efficiency with the paperwork. Clients don’t usually know this but the banks all require certain forms in an order that they want the file in. The problem is that all banks have different forms from each other and the order and how they get them delivered is a mystery for the ages! So the short sale processors usually have all of the main banks and some of the smaller ones figured out and their list grows daily thus making it easier and less time consuming for the agent and the banks.
There is unfortunately a bank out there who can take over nine months to get an approval and then are shocked when the buyer’s appraisal comes in a lot lower than the original price. If that happens to you, most likely you will have to re-submit the new appraisal to the sellers lender and even possibly start the negotiation process over again. Wow! No one really knows how long these deals will take including the lenders. The investors sometimes take quite a while when you make it to that stage. It’s really a shame that we can’t clear these properties sooner, it would be better for all involved.
Why do a short sale then? Well, lenders say it’s better on your credit report than a foreclosure but I have heard that they will still count against you just as much as a foreclosure so not sure how accurate that information is… The true fact is that if you intend to do a short sale, you better contact an attorney to find out what the consequences are in your state. The laws are different in each state and the sale could be the best thing or the worst thing for you. Whatever you decided to do have patience when you are buying or selling a short sale, as I wrote in one of my earlier blogs. “The only thing short about a short sale, is the money.” Also it should be noted that in April, 2010 a new Treasury Dept. program will be implemented and banks may or may not participate. There are guidelines they have to follow but the process should make short sales quite a bit better for all of us. You can go to the link below and view the new directive if you wish. https://www.hmpadmin.com/portal/docs/hamp_servicer/sd0909.pdf
Broker / Salesman
550 W. Pioneer Blvd. Ste. 100
Mesquite, NV 89027
Each Office is Independently Owned
Hello again everyone. The Mesquite Real Estate Association of which I am vice President of, met in October with Bryan Dangerfield the Director of Economic Development for the City of Mesquite and Josh Olmsted one of the owners for the Desert Falls International Sports Resort. As I have told you in previous blogs, Desert Falls is really a huge complex and quite a large undertaking. Mr. Olmsted, who I believe is very serious about getting this project completed, went into to great detail on what the resort was going to be like.
There has been a lot of skepticism as to whether or not the DFISR would ever be started let alone completed. However, according to Olmsted they intend to break ground just after the first of the year and the goal is to be playing on the new softball fields in 2010. When asked about funding for the company, Olmsted said that the developers are working with a trust and that Phase one of the project is fully funded. The complex, in case you weren’t aware, is of course going to have the different sports facilities but also dining, shopping and housing. It looks to be a fantastic resort and is being compared to Disney World type resort rather than another sports complex.
Will it ever happen? Well as you know the developers have put a down payment of $316,000, and I don’t think they will want to loose that. However, we will have to wait and see. If they break ground after the first of the year I will feel a little better. It has been delayed as most construction projects do but I can tell your that Mr. Olmsted and others seemed to be very determined to complete the resort and also to make sure that it is engineered correctly from the beginning. Remember folks this is a 500 million dollar project to be built over 5 years. It’s gong to take a while but with the increase of tourist and jobs I believe that it will be a great asset for a town.
Broker / Salesman
Each Office Independently Owned and Operated.
Hello everyone, I wanted to take a little time to wish everyone prosperous New Year. Remember you can always follow me on Twitter or visit my website at www.torresramey.com or on Facebook. Here in beautiful Mesquite, Nevada we have snow on the surrounding mountains and cooler temperatures which tends to put our citizens in an even better mood that they usually are. My family and I feel truly blessed for being able to live and work in a place that we enjoy so much. I hope all of you who have never been here, get to visit one day its an amazing place.
As far as the real estate business goes, sales appear to be picking up but we are watching the markets and especially the government everyday. The rules for doing short sales is rumored to be changing, (we hope for the better) and it appears that the government is trying to make the banks cooperate more with homeowners regarding the “Making Home Affordable Plan”. To give you an example of what is selling in our market, the majority of the homes for sale are NOT foreclosures! However, the majority of the homes that are selling ARE foreclosures. Obviously it’s about the price and most sellers can not compete with the bank owned properties. So we are getting through them as fast as we can but it is a slow process, why? Simply because the banks hire asset managers who are both overwhelmed and not cooperative. The banks by far are the reason the housing recovery is taking longer. We work with them on a daily basis and you would not believe some of the counter-productive things that they do. Hopefully that will change, and soon so that we can get back on track to the recovery we all want to see.
Well that’s it for now, I hope all of your dreams and wishes come true for 2010 and remember as a fellow real estate agent once told me “what ever you think about, you bring about”.
550 W. Pioneer Blvd. Suite 100
Mesquite, NV 89027
Each Office is independently owned and operated.