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Archive for December, 2010

Durham, Cary, Raleigh, Apex, Chapel Hill foreclosed homes.

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Buying a foreclosed home? What you should know going into the process?

For the next two to three years those who are able are going to have their pick of the litter when it comes to foreclosed homes. The trend in the last six month of 2010 is that there are some pretty good foreclosed homes coming on the market in Durham, Chapel Hill, Raleigh, Apex, Cary and Morrisville, North Carolina. Gone are the days, for the most part of the stripped down, abused and beat up foreclosed home. Gone also are the days of really holding the banks hands to the fire and driving a hard nuts bargain.

Lesson one; foreclosed homes are by their very nature at bargain basement prices. This is where most consumers miss the boat. Many real estate consumers of foreclosed homes believe that they can rake the banks over the coals and score a really terrific deal. Banks work off a system where by an actuary puts numbers into a formula and those numbers determine, list price, sales price, concessions if any and commissions. The consumers with whom I’ve worked; who have been successful in purchasing a foreclosed home have “hit their initial offer into the ballpark.” This initial offer is typically within three to five percent of asking price and this includes all concessions. Concessions being closing costs, warranties and any other out of pocket expense the bank would be asked to pay.

Lesson two; unless the property is a portfolio property, the bank has little if any investment or money into the property. Almost all mortgage loans, including those defaulted upon are bought and sold on secondary markets as commodity therefore the bank selling the foreclosed home is a loan servicer and their exposure is in holding the home in inventory. The servicing bank is exposed if the house burns down, develops mold, is vandalized and that’s about it.

 Lesson three; what is as is where is? Simply put, what you see is what you get and what you don’t see is what you get. Here is where you need an experienced savvy buyer’s agent to help you through the process, you also need an agent who knows your market and generally this will not be the listing agent. Most REO/Foreclosed home listing agents don’t work with buyers; they represent the best interests of the bank. This is where I can help you. My 17+ year’s market experience allows me to guide you through the process. I have also sold numerous bank owned properties. Here are my responsibilities to you the buyer:

 1. Make you aware of all hidden and latent fees associated with your purchase of a foreclosed home.

a. Did you know that you might be responsible for de-winterizing and re-winterizing the property even if you don’t get to the closing table?

b. Did you know that there might be significant issues of title including un-cancelled deeds of trust (mortgages).

 c. There indeed might be hidden document fees paid to the bank holding ownership of the foreclosed homes.

d. The bank contract or purchase addendum for the property being pursued may require that the buyer pay fees normally associated with the seller side. Having these documents in hand is critical before purchasing a foreclosed home.

Lesson four; in this down economy there may be unwelcomed residents and conditions associated with the foreclosed home that you are pursuing. I have seen squatters move in during the contract period and the sheriff has had to evict them prior to settlement. I have seen foreclosed homes vandalized or stripped of copper during the escrow period. What the buyer needs to understand is that the bank is under no obligation to bring the house back to the condition that it was in when first discovered by the potential buyer. That is indeed a painful reality.

Lesson five; the listing agent will get me a better deal on this foreclosed home. Nope, isn’t true at all. Most listing agents of foreclosed homes are playing a numbers game. If you don’t buy it someone else will and they are so swamped with paperwork and reporting to their masters at the bank that they don’t have the time or inclination to work with buyers.

Interested in learning more, and there is so much more to learn about foreclosed and short sale properties. Phone me, Michael Sullivan at 919-608-2372 or 1-888-574-6400 and ask for Michael Sullivan at Croasdaile. You may text me at 919-608-2372 or email me at MSullivan@fmrealty.com

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This REALTOR believs that building starts will remain low until this nation is back to work. 

The Herald-Sun – Building starts remain low here.

Interested in buying, selling, renting or leasing residential real estate…phone, email or text me.

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For those of you who watch Durham politics, you know to read between the lines.  Division on the county commissioners board runs deep.

 

The Herald-Sun – Board keeps Page Reckhow.

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The Herald-Sun and Tulia are, in my opinion attempting to put a shinny gloss on the Durham/Raleigh real estate market.  I am not convinced that this is the case.

This piggy backs with my posting from yesterday… not.  What Trulia and Rick Sharga miss is the fact that our market does not exist in a world on its own.  Granted Durham/Raleigh is weathering the storm better than the nation, which should NOT be painted as a rosy real estate picture, but rather should underscore how terrible the real estate market is right now in the United States .

The Herald-Sun – 2011 looks good for Triangle housing.

Trulia’s data I believe is skewed too, they are nearly 3% off of the National Association of Realtors with respect to closed home prices for Q3, 2010; this should cause one to pause and consider how easy it is for statisticians to cook the books and manipulate data.  Similarly, since Trulia relies on automated data feeds, I am indeed skeptical of their numbers.

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Durham Area Trends

  Durham US Local Trend
Price Activity      
Current Median Q3 2010 $184,900 $177,100 Up but slow
1 year appreciation .3% -.6%  
3 year appreciation -1.1% -.19.9%  
3 year equity gain -$2,000 -$44,000  

 

These figures come from NAR, the National Association of Realtors.  Although median prices in the Durham, NC market are up slightly and are ahead of national median prices, it is important to understand that no market exists in a bubble.  The Durham market is reliant on the U.S. market and the entire global economy.  So, without equity as shown by the three year gain, or more accurately loss, home sales will remain sluggish simply because consumers don’t have the money to purchase homes.  Consumer home equity is lost and will take years to recover. 

Home owners can build faster equity in their homes if they make additional payments to principal, avoid borrowing against their properties and if they make cautious investments in enhancing their homes.  Owners contemplating a home sale should gird themselves too; there should not be a presumption of appreciation but rather a presumption of a loss.

Similarly, owners considering a home sale should engage a real estate professional sooner rather than later to discuss merchandising their property, staging their property and enhancing their property so that it stands out among the competition.

Interested in doing so?   Call me, Michael Sullivan, I’m always happy to walk through a property with an owner.  I can also offer rental and leasing solutions to owners in a position to move in that direction.

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This article misses the mark a bit.  Many of the now gone retailers at Loehmanns are gone not because of the highway construction, which NEVER closed Hillandale Road or the exit ramps but because the retailers pricing structures were way too expensive.

The Herald-Sun – Loehmann s remains in limbo.

As for the assertion that there are limited grocery store choices for the Watts-Hillandale neighborhood, that is malarkey too, there are six supermarkets withing five miles of the neighborhood.

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