Last week I made mention that I would be following up on the post about the foreclosure sales data and would have done this a bit sooner but I was distracted by other things like silly baseball games and such. Also the cooler weather over the weekend allowed me to get some things around the house done that I had been putting off. Filled up the trash can nicely.
I've also struggled with the presentation of the information and photos. I have no intention of belittling the listings of the properties that are currently for sale. Same goes with the listing brokers/agents. I won't be sharing details of the three listings I visited last week. No MLS numbers, no addresses, no prices, or that sort of thing. I basically only want to offer the reader an opportunity to see conditions for themselves. I also want to show more traditional sellers what they might be up against. I did that with the data last week and I think the photos will offer the same sort of thing.
I picked three foreclosure listings at random, but believe that the following photos are a good cross section of what buyers can expect to see when they look into listed property that has been foreclosed on. I venture to say that all of the listings have positives and negatives... much like any home on the market right now.
Backing up for just a minute I want to share some of my experience with you.
From 2002 through 2004 I used to list foreclosure property (I'll call it REO property from here on out in this post) for a company affiliated with FreddieMac. Back then REO properties were not as prevalent in the sale market as they are today. Banks used to try and compete with the traditional sellers and often would have me, the agent, see to it that the property was cleaned up and as functional as possible. The REO property may have defaulted with the borrower owing say $75,000 to the bank (for example only), but the REO property fixed up and pleasant would fetch as much as any other competing for sale listing... often meaning that the bank would see huge proceeds upon completion from the sale. It wasn't uncommon for the banks to sell for $20,000 or even much more than what the former owner owed against the property. The banks were motivated to do the spending because they knew they'd get it back and then some.
Today though... not so much.
I am not actively trying to get a bank, flush with non performing assets, as a client in this market. So I can't say for certain, but I'm willing to bet that things have changed for brokers/agents that do go after the REO property listing business. One thing I did notice was that no utilities were turned on at any of the listings I visited. Back when I listed REO property, utilities were on, toilets were operational, light bulbs were replaced, batteries in smoke detectors were also replaced. Simple things really, but each visit I made to a REO property last week came complete with non functioning toilets and chirping smoke alarms.
I'm only pointing that out to say that things are different now than just a few years ago... not better... not even worse... just different.
One other major difference I see is in attitude. It seems that all REO properties listed for sale come with the disclaimer that the buyer will be purchasing the property 'as is'... meaning no buyer requested repairs of the seller. If you are a traditional seller... please keep that in mind because it is one of the benefits that you can offer a buyer that the banks don't seem to have any interest in.
Now... lets take a look at some photos...
This is a photo from the oldest listing I looked at of the three. The kitchen is clean, but it is cramped... especially when the new owner decides to place a refrigerator in there... somewhere. Times have changed and the latest wave of new homes have better kitchen areas than older homes do.
Interior door knobs... the listing needs them for all the doors in the house.
Pride of ownership is put to the test at most REO properties. The photo does not come out as well as I would like, but this carpet had the appearance of being 'cleaned' but it is deeply stained and likely would have to be replaced unless a well placed throw rug (or two) is of the new buyers liking.
This listing could easily have been a rental at one time and I'm not disparaging the last person or person's that dwelled here. Also... not coming through in the photo is the smell that this home comes with. A typical odor that emits from many homes that have been vacant for some time and/or was a place where smoking was allowed indoors.
Is that mold?? I'd ask the owner, but the owner is a bank, and the bank is telling me that I'm buying 'as is'.
Look honey... the 'as is' home comes with an interior door that we'd have to replace.
Throw rug goes here, part two.
Only have one photo of this particular REO listing. The home was built in 2006. I didn't notice any obvious defects (other than one small deep stain in the carpet). REO properties in good condition do exist and this home might be an excellent starter home or even a good rental. For as nice as the home seems to be in, I do expect to see price reductions before it is sold. There may have been some pride of ownership in this house, but it is not as evident on the street it is located on. There seems to be at least one 'catch' with REO property.
Again, the point of these posts about REO properties was not about the folks that used to live at these places, or the brokers/agents that represent the bank owners, or the banks themselves that own these places. Just wanted to point out that properties like this are seeing the most action on the sales market. These listings are the competition for more traditional sellers.
The last couple of months have seen more sales of foreclosures than more traditional listings (owned by people with a heart-beat). Typically traditional sellers have well maintained and kept homes and offer them on the market to buyers who would appreciate the effort.
Clearly, though, more than half the buyers have settled on something much less than well maintained and kept. They've settled on price... warts and all.
Shameless plug time...
If you are interested in looking at REO properties for purchase, please consider using me as your agent. My listing experience of these sorts of properties will help you get the best possible price in today's market. We'll negotiate hard on price since it is the only concession that the banks appear ready to deal on. We'll even renegotiate when it is appropriate. I know the process and the tactics and we can use them to great advantage. Email me or call... let's make a deal!!