Foreclosures are Now the Normal Market

I believe that the foreclosure crisis will continue through 2015 and maybe even beyond. This is our now normal market. I think the so called normal market of the past is gone for many years to come, unfortunately.  And now the FHA loans with their low 3.5% down payments are the new 100% financing loans where buyers have little stake in the property. Watch for these buyers to start defaulting. The very sad part of all this is that many of these foreclosures (REOs) represent a family who has lost their home.

Finally Got an REO account

We have joined the ranks of REO listing agents. I guess now we have to stop bashing them...well maybe not all of them. The best part about this is that we do NOT have to evict anyone. They are former apartments converted to condos and the people who are currently renting the foreclosed units will continue renting through their leases.

These condos are more proof that this whole foreclosure thing is not over. Our listing includes 39 units, which are being phased in 12 units at a time. We may be bouncing at the bottom of the market, but I think we'll be here until 2012. It will coincide with the Mayans "end of the world" prediction. Though hopefully, it will instead be the end of this crazy market.

Wanna buy a condo?

Escrows are Taking Forever

The days of the 30-day escrow are disappearing in my world. I just had an escrow go 62 days, the following a VA loan, went 52 days, and a current escrow is no where near closing at 30 days, which is this Friday. Loan docs anyone?

I used to take the 30-day escrow for granted. Now the rules for loans are changing on a daily basis making it very hard for even the most qualified buyers to close a loan in a timely manner. To top all this off, the very companies that make these loan are the same ones who have no tolerance for an escrow that goes over 30 days. Foreclosed homes owned by the banks start charging $100+ per day for an escrow going over its closing date. Short sale approvals will dock the Realtors' total commission a point if it goes over escrow. Yet, try asking these same banks to hurry up an escrow. Surely, you jest!

You think there would be a little empathy here. But no, banks are ruthless entities that don't care about Joe Home Buyer. You're just a FICO score to them. I'm pretty sure there's a special little Karmic Hell for the mean* ones when this is over.

Banks as a whole are mean; however, many loan officers are very, very nice and are not included in any of my lashing.

It's a Seller's Market?

The media is still calling this a Buyer's market, and in some cases it is. However, if you're trying to buy a bank owned property, it's a seller's market. Banks are pricing their listings at rock bottom, which is bringing in multiple offers. A client called and wanted to look at a home that was just listed for an incredible price in Elk Grove, I checked with the agent and it had 17 offers. SEVENTEEN! Sellers of "normal sales" of homes are begging for just one offer, but those homes are overpriced.

So if you're a buyer and making offers on bank owned homes, don't lowball...the bank won't even acknowledge you. Also, be patient, your home is out there and when it's supposed to be yours, that's the house you'll get.

The REO Adventure

REO (real estate owned) homes, also known as foreclosures, are an adventure in home showings like no other. When I'm touring or previewing homes that are REO I never know what I'm going to find. Sometimes it's an absolutely beautiful home and other times, well, not so much.

This past week I have toured over 20 REO properties and while I will have to say that agents of these homes are really starting to clean them up, there are still 20% or so that are quite the adventure. When opening the door of an REO, I'm always a little hesitant as to what I will find, what smells I'll encounter and how quickly I will feel the need to take a shower afterward.

For instance, one such property had a dead bird at the back window and ants in the process of having a very nice dinner. Another home, had a pungent unknown smell that made it hard to breathe. While another, had piles and piles of garbage all over the home. I practically ran out of that one. And lastly, another had no windows, flooring or inside walls. While I laughingly joked to my client about finding the lock box, I noticed the sign said "By Appointment Only."

Since the Sacramento area's REO properties are predicted to quadruple by the end of 2007, my adventures will continue...never a dull day in real estate!