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Wednesday, December 19, 2007

Bank Repo Real Estate - A Buyer's Guide To Bank Owned Properties

What is Bank Owned Real Estate?

Bank owned real estate is known as many things throughout the country. Agents will refer to it as R.E.O for "real estate owned" and consumers most likely know it as "Repo" property. Whatever you want to call it, bank owned real estate can present some excellent opportunities to home buyers and investors alike.

R.E.O. property is real estate that has been foreclosed upon by the lender or bank, brought to public auction where it was not purchased, and now is being sold by the bank through a broker with the consultation of an attorney.


Why Should I Buy R.E.O Real Estate?

Bank owned real estate is usually brought to market at a very attractive price in order to generate a quick response from qualified buyers. Banks do not like to own real estate and are usually looking to unload the properties as quickly as possible in order to mitigate their losses. This presents an excellent opportunity for consumers to capitalize and pick up some fantastic real estate deals.


What Are Some Things To Watch For With Repo Property?

You've got to imagine the mindset of the former owners of the home if you really want to understand one of the downsides of R.E.O. real estate. The previous owners probably did not leave on favorable terms and may have been vindictive toward the lender, the courts, and probably the entire real estate process.

As a result, buyers of bank owned real estate often find that many fixtures are damaged or even missing. The overall condition of the property will probably rate somewhere between fairly good to absolutely disgusting. Repo home buyers should not expect to find a sparkling, newly remodeled home, with all the latest decor. In fact, bank owned homes often only appeal to people with a good ability to see the potential in something. If you lack this foresight and vision, bank owned real estate may not be for you.


What Do I Need To Buy Bank Owned Real Estate?

With R.E.O properties, more so than any other kind of residential real estate, the guidelines for buying them are fairly clear and inflexible. Many banks have a standard Counter Offer that they send to all prospective buyers outlining their parameters. Here are the most notable of these very typical guidelines:

1) Repairs are rarely made to the property and no warranties will be granted.
2) Banks like a larger deposit than in a normal real atransaction.
3) Absolutely no contingencies for the sale of buyers property will be accepted.
4) In most cases, the price will deviate very little from the banks low asking price.
5) The buyer will need to close on a specified date or risk late penalties.
6) Termite reports or natural hazard reports are often purchased by the buyer.

Although most of these conditions are rather self-explanatory, a few have implications that R.E.O home buyers need to understand very clearly.

The first item means that repo buyers need to satisfy themselves with regards to the condition of the property. They still, however, will have a "no harm" period during escrow where they can have a professional inspector look at the property and decide whether or not they like the condition enough to continue. This is all without risk of losing their deposit.

The third item means that if the prospective buyer needs to sell some real estate in order to buy the bank owned property, they need to sell it first before the bank will even consider the offer. This is often a major hurdle but may not be an issue with first time homebuyers or investors.


Where Do I Find Bank Owned Real Estate?

Bank owneed real estate is not for everybody, but for those who enjoy getting a good deal, and are prepared to deal with some probable repairs, the benefits can be priceless! Home buyers in Orange or Los Angeles Counties, who are willing to tell us a little about what they are looking for, will find our Bank Repo real estate finder very helpful. People outside these areas can also contact us if they would like to be directed to a top R.E.O. specialist in their community. Here's to a good deal!

Tuesday, December 11, 2007

Finding The Orange County Home Buyers - Our 10% Theory For Real Estate Sales

Orange County, California home buyers are certainly not as plentiful as they were for the last six or seven years. If anybody has picked up a newspaper recently, they are well aware of the headlines that that would like them to believe that absolutely no homes in Orange County have been sold in the past twelve months! Headlines such as "Record Foreclosures", "Flat Sales", "Prices Falling", have been doing enough damage on their own, to speak nothing of some rather famous pundits and authors adhering to a lazy broad brush generalizations in stating things like "Don't buy any real estate for at least a few more years!" Stating things as blatant as this is not only irresponsible, but it just could not be any further from the truth! Homes are still being sold, and buyers are still actively looking for houses in Orange County. The question is how to find them.


Perceptions Of Real Estate In Orange County

The average Orange County home buyer has certain perceptions of the market and the sellers of the real estate have perceptions as well. People looking at purchasing the Orange County real estate are often told that it is a buyers market, all the sellers are in foreclosure, and that they really should wait more as prices will come down. The owners of Orange County real estate have some perceptions of their own. They usually believe that the buyers have magically disappeared, the ones that do exist are all trying to make low ball offers, and that if they just wait, the prices will come back.


The Reality of Orange County Realty

Obviously, we have some discrepancies of opinion between the two sides! The fact is that real estate continues to sell throughout most of Orange County, albeit at a slower pace than two years ago. Real estate always has been and always will be a local business, and by local we mean zip code, neighborhood, or even street specific. It is completely normal to see a rapidly slipping market on one side of the street, while just on the other side, sales continue to chug along.



While Orange County real estate statistics remains rooted at a local level, there are some general concepts that can be applied across the county. One such concept is what we call the top percentage principle. Our principle states that only a certain number, or percentage, of homes will sell each month within a specific neighborhood, and a house will not sell until it enters into that top percentage of real or perceived "deals." For example, lets say the top percentage in a certain neighborhood is 10%. This means that if a home owner in the area wants to sell their home, they will need to be in the top 10% of real or perceived "deals" within that area in order to get it sold. If they are not, they will need to break into the top 10% of deals for next month or the home will still not sell. The actual percentage number will fluctuate with area and time, but the concept itself will hold steady.

Sales volume is not the only factor that should be measured at a local level. Home prices throughout Orange County are also fluctuating zip code to zip code. Even though its beyond the scope of this post, we can provide home buyers with many examples of areas in the county that are not in a price decline if they'd like to contact us.



What it all means to Orange County home buyers and sellers

Sellers:

For sellers of the local real estate, the most important thing they can do is get into that top percentage of homes that are selling, and get there quickly! This can be done a few ways, but remember first that perceived value is just as important as tangible value. Perceived and tangible value can be created by a combination of the proper marketing, benefits, and competitive pricing. More often than not, home sellers do not mind the first two factors, but find the third to be excruciatingly painful. Despite the pain levels, Orange County real estate owners need to have their Realtors evaluate the market and get their property priced according to what has sold this month. This needs to be done quickly because time is not the cure when new listing are coming up every day making it tougher and tougher each month to get into that top percentage.




As a seller of Orange County real estate, if your saying things like "I can just wait for the right buyer/market", "I don't really need to sell", or "I need xxx dollars despite what the research says" our best advice for the market is to just get out. This truly is not a time for unmotivated sellers to "play the market" and just see if they can get some unjustifiable price. For motivated sellers who really want to sell, careful adherence to our top percentage principle will enable them to find the buyers and ultimately get their Orange County home sold.


Buyers:

Orange County home buyers also need to understand a few things about the current market. Despite what the headlines read, the best deals on the market are selling, and often selling fast. To illustrate this point, we operate a section on our website that we call the Orange County hot property of the week. In it, we post some of the best deals to be found on property in all types of price ranges. As of this date, we are needing to update our section at least every week and a half or our site is outdated as these good deals are just not available. This speaks volumes as to the health of the market!

It is true that there are many properties on the market in Orange County, and as we all know, many of them are still grossly overpriced. Some sellers have gotten ahead of the curve and offered attractive properties at very competitive prices. These are the properties that fit into our top percentage principle. Now then, just because a limited number of homes are actually selling, and some of them may be distress sales, like foreclosures, it does not mean buyers will be able to buy the homes for pennies on the dollar. This concept is best explained in our 6 part write-up on Orange County foreclosure property.

Basically, if Orange County home shoppers want to become Orange County home owners, and do so by finding a good deal, they had better have good help, reasonable expectations, and be able to move quickly. The best way to do this is to let a local real estate team help in finding these good homes, and the best way to do that is to use our home finder service where they just tell us a little about their needs, and we custom build a home search campaign around those needs for free! Best of luck and happy hunting.