Buy Foreclosutes Before Its Too Late

Posted on August 9th, 2009 in All Articles.

Here is the beginning of the national media articles calling the bottom.

From CNN Money com
Buy foreclosures now – before it’s too late
In many markets, if you want to buy a repossessed property, you better come with your best offer first — and fast.
By Les Christie, CNNMoney.com staff writer
August 7, 2009: 01:13 PM
NEW YORK (CNNMoney.com) — You’ve heard of speed dating? It’s got nothin’ on foreclosure buying these days. In many places, anyone who wants to buy a foreclosure better act fast, or they’re going to come away with bupkus.

REOs, the industry term for homes repossessed by lenders and put back on the market, are often selling in a day — sometimes in less.

“We’re seeing REOs go very quickly. Offers come in immediately after the listing comes on the market, within 24 hours,” said Brad Geisen, founder of Foreclosure.com. Some homes have been put into contract in less than 90 minutes.

In Stockton, Calif., foreclosure ground zero, the market has changed radically. Last summer, Cesar Dias became famous for founding the “foreclosure tour,” in which he packed potential buyers on a bus and ferried them around to some of the thousands of distressed properties.

Today, the foreclosure tour in Stockton is history. There are too few REOs.

“For every listing that comes out, we have 10 buyers,” said Dias, an agent with Approved Real Estate Group. “We had a lot of inventory last summer. Now we’re down to 1,500 listings — from more than 5,000.”

San Diego buyers face the same trend. “Agents have one or two REO listings now, compared with 15 or 20 a year ago,” said realtor Adrianna Delgado of the Delgado Group.

And there’s almost no negotiating, no back-and-forth, after the initial bid. “We don’t get a counteroffer,” said Delgado. “The sellers just ask for your highest and best bid. If you’re not prepared to send in your best bid the first day, you may as well stop looking.”

In Florida there are so many buyers for foreclosure listings that real-estate investment companies, which had been snapping up properties, are now facing stiff competition, said Vanessa Grout, VP for acquisitions at New Valley, a real estate investment fund.

Even in distressed Detroit, REOs are still in high demand. “For a good house that’s not too beat up, in a good neighborhood, there’s no lack of buyers in this market,” said Andy Sakmar, founder of Century 21 Sakmar in the Motor City suburb of Rochester. “There are a lot fewer of these properties than a year ago, and the super buys get multiple offers.”

Priced for speed

The biggest factor in the feeding frenzy is, of course, rock-bottom prices. Banks are pricing homes to move.

Sakmar tells of an REO that recently went on sale in a community of mostly $300,000 homes. It was in good shape and should have sold for $200,000, in Sakmar’s opinion. Instead, the bank listed it for $129,000.

“It drew thirteen offers in two days,” he said.

That kind of cut-rate pricing is very common, according to Foreclosure.com’s Geisen. Instead of holding onto REOs for the best prices — and paying the property taxes and maintenance and heating costs — banks are selling the homes as quickly as possible.