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• How to find property values you can trust
• How to estimate repairs
• and more, so stay tuned!

Waiting out the storm of foreclosures

from the Clark Howard Show blog

A lot of Americans are afraid to buy homes right now. It’s no wonder that people are skittish about jumping from renter to owner when you think about the constant barrage of “housing crisis” headlines. Clark wants to offer some.., Click here for the rest

This is good news for owner-buyers and investors but it doesn’t really represent bargains galore as much as it signifies the market returning to normal. What I mean is that real estate prices in California increased so high so fast that normal everyday folks couldn’t afford to buy a house and many of the ones that did buy a home are struggling to keep them. How do I know? Well that why they are being foreclosed. The rapid price declines in California as in many parts of the country is evidence of the market finding normalcy, that magic price people can afford and are willing to pay.

Another article at blackenterprise.com I was reading said it best; “May 21–More than one-third of Los Angeles County families could afford to buy an entry-level home in the first quarter — 66 percent more than a year earlier — thanks to an epidemic of foreclosures that depressed prices, a trade group said Tuesday.”

It’s really just basic supply and demand. When the folks can’t afford the supply demand falls.

1. Use bird dogs. No, not really a dog but a person who looks out for distressed property. He or she finds potential deals and sells the “lead” to investors. Many people are willing to bird dog because it does not take any money or special skill to find distressed properties. What you pay this person varies because bird dogs can give you raw leads or they can gather more detailed information for you. Find these people at your local real estate investment club. Just one note of caution, some states, consider bird dogging real estate practice requiring a real estate license. Check with your state’s real estate commission for guidance.
   
2. Ask your mailman. Who knows the neighborhood better than your mailman?
   
3. Pass out business cards everywhere you go with a message on the back that says you buy houses and will pay for leads.
4. Find a real estate agent who will represent you as a buyers agent. Agents work on commission and will support and help you to the end of the earth if they believe you are on the level. The problem is they get calls all day long from fake or wannabe investors. My advice; don’t ask too much up front. Try to get a list of properties and drive by them. Call your agent to show you the ones you are serious about and allow them to handle the sale. After a sale or two you will have a friend in the business.
5. Stay in touch with your sphere of influence. The most successful real estate agents in the business get new business this way. Chances are you probably know 50 people, friend and family types you call by first name. Make it a point to speak with these people on a regular basis (every 1-2 weeks) and ask if they know of someone in need of selling a home. Tip: when you contact them make it a reason other than real estate.
   
6. National Foreclosure Listing services. It’s probably like beating a dead horse at this point but the national foreclosure listing services like Foreclosure.com and Realtytrac can email you listings as they are posted on the market in real time.
   

Investors looking for preforeclosures use bandit signs, newspaper ads, postcards, etc usually stating “we buy houses” to locate homeowners in trouble. Many investors have made fortunes, or so they say, in this real estate investing niche. If you are thinking of doing this type of business you should know it is not as carefree and easy as the late night infomercial gurus want you to believe.

As with any business endeavor there are risks involved. Liens on the property could sour the deal if they are not identified. A lien an encumbrance on the property title that tells the public that the lien holder has some type of claim to the property. For example a mortgage could be considered a lien. The mortgage holder has a right to foreclose if not paid. Or, If the homeowner fails to pay taxes a tax lien may be placed against the property. Liens are a risk in preforeclosure investing but when a property is foreclosed most liens are extinguished.

One type of lien to take special note of is a mechanics lien. If work has been done on the property and the contractor has not been paid they can file mechanics lien and in some extreme cases it can force the sale of the home to pay the balance due. What makes a mechanics lien special is that they are allowed 180 days (states may vary) to file the lien. That means you may buy a preforeclosure in February and find out in May that a lien has been filed because there is a contractor’s bill due on the property.

Liens should be uncovered with a title inspection. Mechanics liens may not show but some type of conversation should occur with the seller to uncover any recent work done on the property and who did it. Then it is simply a matter of contacting the contractor to find out if the work was paid for in full.

The bonus DVD is invaluable all by itself, with “on-site” one-on-one instruction from Foreclosure.com Founder, President and CEO, Brad Geisen. The video shadows Brad throughout various property inspections. During home tours, he covers foreclosure buying strategies, in-depth analysis and other aspects needed to spot great foreclosure deals and flip them for optimal profits.

About Foreclosure.com:
With more than 1.2 million foreclosure, preforeclosure, bankruptcy, FSBO and tax lien listings in one place, Foreclosure.com delivers America’s largest and most accurate searchable database of foreclosed homes and investment property information to its customers and business partners. Based in Boca Raton, Florida, Foreclosures.com works with hundreds of top lending institutions and government agencies to list diverse property types on its Web site, including Real Estate Owned (REO); Department of Housing and Urban Development (HUD); Department of Veterans Affairs (VA); Fannie Mae; and other government agency and financial institution properties; as well as listings from an extensive network of corporate sellers. On the Web: www.foreclosure.com.

On the whole I think these tours can be a good way for folks to see what foreclosures are all about. I’m not just saying so because I’m a practicing real estate agent, but a tour could be a good place to gather information and make contacts. For instance you may not know what questions you should be asking. During the tour you could listen to what questions are asked and the answers that follow.

Many of the tours I’ve heard of have a contractor, attorney, and other experts on hand to answer technical questions. This is a great opportunity to make contacts and learn from professional experience. You won’t find too many events where all the experts are so easily accessible.

Lastly, a sales pitch is almost inevitable but where better to receive one than in a crowd where you can maintain distance from the presentation to keep from being pressured. One warning however, be careful not to get caught up in the moment. Crowd dynamics can lead to behavior that doesn’t make sense, in this case buying an old beat up house because everyone else on the bus wanted it to. Seriously, foreclosure listing tours can be great for info purposes but not the best atmosphere to make buying decisions.

So without further ado click the link below to read the article:

Want to Be Taken Seriously in the Foreclosures Market?


Here are 4 suggestions:

1. Call your bank or credit union. Since foreclosure properties are owned by a lender (most often a bank or credit union) one way to find foreclosure listings is to simply call the banks and credit unions in your area. Ask for the real estate owned or REO department. This approach will likely work better for small local banks rather than the large chains. the large chains may have a corporate REO department or a firm that handles it for them.

2. Visit the county courthouse. When properties are foreclosed the proceeding is announced to the public. These announcements are posted at the county courthouse. Practices and Laws vary by state and can differ even within a state so to be sure call your local courthouse to get the details. Two excellent questions to ask are: can the information be viewed online and/or is it published in the local paper, either of which could be a huge time saver.

3. Hire a real estate agent. Local real estate agents that specializes in helping buyers find foreclosure listings are your best bet. Most agents like traditional retail buyers and may try to steer you away from buying a foreclosure. If you are serious about finding a foreclosure listing you want an agent who specializes in the distressed and/or foreclosure market. There are agents that can operate in the traditional and foreclosure markets but their are real differences and unique challenges specific to purchasing a foreclosure. If you can’t find a foreclosure specialist the next best thing is a buyer only agent.

4. Try a foreclosure listing service. Services like RealtyTrac and Foreclosure.com publish foreclosure listings nationwide. They gather the property listings from many sources. RealtyTrac claims to publish 1 Million properties from nearly 2,500 counties nationwide, and is the foreclosure data provider for MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal. Foreclosure.com is equally impressive boasting over 1.2 million property listings from around 1500 counties, updated daily. They both offer a free trial.

Locating foreclosures is not hard. You’ll soon see that foreclosed homes are everywhere. What is tricky is finding a property that will to be a good value. Now, if what you want is a place to live for a good price you’ll have more options. Most foreclosure listings are offered at or near market value at first. For this reason the foreclosure listings that need only minor work usually go to an owner occupant.

No matter which or how many of these steps you want to use Step 3 is the most important and in my opinion should be used in conjunction with all other methods, at least until you get considerable experience. An agent can help you determine what a foreclosure property will sell for after it’s ready for market and can often assist with repair estimates (crucial for deal analysis). Agents have access to attorneys, contractors, inspectors, etc (people will be needed when searching for foreclosure listings). But the most critical factor…., a good buyer’s agent will tell you when you need to move on because some deals just don’t make sense.