Blog > Blog > Archive by tag 'foreclosures'

February 28, 2010 at 12:33 am

Buying foreclosure properties can be a frustrating, cutthroat enterprise. The best properties usually have investors circling like vultures. You’re never going to be able to win all your bids, but there are things you can do to increase your chances of being the winning bidder. And get the best price in the process.

The following guide will help arm you with information that can help you along your road to becoming a power buyer:

  • Financial Viability – Keeping funds available at all times; ready to pounce on that next great deal.
  • Earnest Money – How much should you put down, and other negotiating tactics involving earnest money.
  • Limiting Contingencies -  Sometimes inspections are unavoidable, but keeping contracts as clean as possible can really help when making an offer.
  • Offer Pricing – Offer price is unquestionably the biggest single difference between a dead deal and an accepted offer.  Avoid overpaying, while not letting the good ones slip through the cracks.
  • Persistence – Whether it is not letting a lost contract get you down or keeping on real estate agents and banks when an offer is in play, sometimes the squeaky wheel really does get the grease.
  • Dates & Timetables – Keeping closings short and sweet can really increase the desirability of an offer.

July 30, 2009 at 10:04 am

I always get a kick out of the fact that everybody and their brother is talking about short sales these days. I don’t doubt that you can find some great deals out there via the short-sale route, but these deals generally turn out to be a waste of time. Consider these issues:

  • Most sellers and/or their agents don’t know what they are doing – People seem to have this odd impression that even though they owe $200,000 on the loan, they can just put the property out on the market for $120,000 and short-sell it without the bank blinking an eye. No though for protocol, valuation, just a lazy desire to have someone else shoulder the impact of their foolish purchases
  • The process is time consuming – A two to three month turnaround is certainly not unheard of to close a short sale. With ever changing lender practices and market environments, what might seem like a good deal today, might not seem so great three months from now when it comes time to close. I have seen buyers get tied up waiting on a short sale, only to pass up other great (and easier) deals while they wait.
  • Wasted effort – Considering how time consuming the process can be, its amazing how many owners and listing agents put these properties on the market when they are 15 days from foreclosure. You end up putting an offer on the table, jump through every hoop imaginable, and the property ends up getting foreclosed on before you can get anything done.
  • There are plenty of great foreclosure buys – I stay plenty busy, and find tons of great deals from the seemingly endless supply of foreclosures that are constantly coming on the market. That isn’t changing anytime soon either. No matter what kind of investment property you are looking for, there are always plenty of properties that will fit your criteria coming on at any given time. Why jump through so many hoops to possibly make a deal when something just as good is right in front of your nose?

In short, for most investors, the short sale is not worth messing with.  In most situations at least. That is not to say that you shouldn’t consider giving them a look, but don’t let all those so-called gurus make you think it’s so easy. Just like anything else, “there ain’t no such thing as a free lunch.” There is a lot of hard-work that goes into making these deals work and if you are looking for a quick buck you’re better off looking elsewhere.

April 20, 2009 at 4:07 pm

As great as being on NPR was, I was a little bit let down that the story aired only in St. Louis, and not nationally as I was told. It seems that I have nothing to worry about anymore. The story ended up airing on the national program “Marketplace” last week. Here’s the story.

April 1, 2009 at 11:14 am

I was hoping to have a little more notice, but my interview with St. Louis NPR affiliate KWMU on foreclosures is airing today. Read more

March 3, 2009 at 6:44 pm

When buying a foreclosure, like all other properties, you need to set a closing date for every contract. When setting this timetable you need to consider what kind of affect the proposed dates will have on your offer. Read more

January 30, 2009 at 2:26 pm

Being creative with earnest money in real estate transactions is one of the most commonly overlooked negotiation points in a contract. Especially for foreclosures, with their battle-weary bank-owners trying to cover their butts. They want assurances. Read more

December 23, 2008 at 12:59 pm

It seems like Pulaski Bank couldn’t resist the call of all that bailout money. The Post Dispatch is reporting that they will receive an infusion of $32.5 million fromt he government in exchange of like amount of stock. Reports say that the bank is well capitalized, but they want the money to be able to lend more in the current market. One part of me wants to beleive that, but the cynic in me says this will have no affect on the amount of loans they are giving out. Sure would be nice though.

December 11, 2008 at 5:14 pm

With the glut of foreclosures that are pouring on the market from the banks, it can be hard keeping track of which properties are worth your time and which aren’t. I work with this stuff full time and its still tough for me. Knowing how difficult it can be, a couple months ago I started working on a new section for this website called Investment Insider. Read more

November 25, 2008 at 10:32 am

You’d think that the sky was falling. Here’s the bad news of the day on housing:

Meanwhile, the Standard & Poor’s/Case-Shiller national home price index released Tuesday tumbled a record 16.6 percent during the quarter from the same period a year ago. Prices are at levels not seen since the first quarter of 2004.

This doesn’t make me happy, but I still don’t understand why people overreact so much about things like this. People have become so spoiled due to years of steady appreciation that this blip has everyone running for the hills. We need to all get back into focus. If inflation is 4% annually, any appreciation of home values exceeding that amount should be looked at as a bonus. After years of 8% annual appreciation we are finally resetting back to a level of sanity. We need to get used to it. This is probably going to be the way of things for the foreseeable future.

Click here for the full article.

October 29, 2008 at 3:10 pm

In the current economic environment, I see a lot of people worrying about their own personal economic situation. The typical pattern is to pull back on expenditures and investments, which is a natural and understandable reaction. For many people, this conservative approach is the best way to weather a storm like this. However, for the more adventurous at heart, times like these are not time for panic, but of opportunity. The chance to make profit through real estate might be the best it will ever be in our lifetimes. Read more

September 22, 2008 at 8:42 am

With all the sweeping changes hitting our country’s economy right now, I don’t know if many people truely grasp how sweeping these changes could be. Looks like we just got some more fuel to feed the fire. With Bear Stearns gone and Lehman Brothers gone as we know it, the fate of the last two big investment banks seems to be sealed: they really aren’t going to be investment banks anymore. Both Morgan Stanley and Goldman Sachs will become traditional commercial banks. The times they are a changing. Check this out for more.

September 12, 2008 at 3:12 pm

Check out this surprising spot-on article about the Fannie Mae/Freddie Mac bailout from David Nicklaus of the St. Louis Post Dispatch. I’m still afraid the cure could be worse than the disease here. Hopefully that’s just the cynical, pessimist in me.

September 12, 2008 at 2:43 pm

 

Whether you utilize a professional inspector when buying properties or simply rely on your own walkthrough, you can’t possibly know everything about the building at first glance. Unless you are from the Planet Krypton, you can’t discern the condition of the sewer lateral without taking additional steps. Read more

September 11, 2008 at 2:40 pm

It sounds like the Fannie Mae/Freddie Mac shakeup won’t be too big an issue for local banks in Missouri and Illinois after all. So this article in the Post Distpatch claims anyway.

September 8, 2008 at 10:42 am

The boat has been sinking, but a bailout is coming. If you haven’t already heard the news, it appears that the United States government will be bailing out federally backed lenders Freddie Mac and Fannie Mae to the the tune of $100 billion each. You can see more details on that here. There seems to be a universal sigh of relief at the moment. Stocks are shooting up and optimism is in fashion. Read more

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