FORECLOSURE FILINGS AT 10-YEAR LOW

Foreclosure Fillings At 10-Year Low

Cash Buyers Lists News​​

The U.S. housing market ended 2016 with lowest level of foreclosure filings in 10 years, according data released by ATTOM Data Solutions.

The newly published Year-End 2016 U.S. Foreclosure Market Report determined there were foreclosure filings on 933,045 properties last year, down 14 percent from 2015. The report also found that 0.70 percent of all housing units had at least one foreclosure filing in 2016, the lowest annual foreclosure rate nationwide since 2006.

ATTOM also reported that there were 85,919 U.S. properties with foreclosure filings in December, down one percent from November and down 17 percent from December 2015. Last month marked the 15th consecutive month with a year-over-year decrease in foreclosure activity.

But despite the national trend, 12 states and the District of Columbia posted a year-over-year increase in overall foreclosure activity in 2016, most notably Delaware (up 45 percent), Rhode Island (up 29 percent), Massachusetts (up 21 percent), Connecticut (up 21 percent) and Hawaii (up 20 percent).

And 25 percent of the top 216 metro areas also showed year-over-year foreclosure activity increases, most notably Provo-Orem, Utah (up 30 percent), Honolulu (up 29 percent), Lynchburg, Va. (up 29 percent), Springfield, Mass. (up 29 percent) and Tucson, Ariz. (up 27 percent).

“The national foreclosure rate stayed within an historically normal range for the third consecutive year in 2016, even as banks continued to clear out legacy foreclosures from the last housing bubble, particularly in the final quarter of the year,” said Daren Blomquist, senior vice president at ATTOM Data Solutions, the new parent company of RealtyTrac. “Foreclosures completed in the fourth quarter had been in the foreclosure process 803 days on average, a substantial jump from the third quarter and indicating that banks pushed through significant numbers of legacy foreclosures during the quarter. Despite that push, we still show that more than half of all active foreclosures nationwide are on loans originated between 2004 and 2008, with a much higher share of legacy foreclosures in some markets.”

Source: National Mortgage Professional

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DISTRESSED PROPERTY TRANSACTION SKILLS ARE PERENNIAL

DISTRESSED PROPERTY TRANSACTION SKILLS ARE PERENNIAL

Cash Buyers Lists News​​​​​​

While foreclosures have decreased nationally this year to an 11-year low, there are areas of the country which are showing a surprising increase in foreclosure activity. This may be due to differences in the way specific regions are recovering from the great recession, or because of more recent impacts to local economies driven by things such as changes in oil prices.  As reported recently by REALTOR(R) Magazine, according to RealtyTrac and ATTOM Data Solutions, states seeing recent increases in foreclosure activity include (in order of increase): Delaware, Arizona, Utah, Connecticut, Oregon, South Carolina, Massachusetts, and Virginia.

The article also offers a visual heat map that you can review to see the changes in foreclosure activity in the specific areas you serve. And even while foreclosures have declined overall, there are still 1.4M residential properties nationally that have either been abandoned by their owners during the foreclosure process (so-called "zombie" foreclosures) or are bank-owned but still vacant-especially in Florida, Michigan, Ohio, Illinois, and Georgia. Banks are eager to get rid of these properties to help ease low inventory concerns.

Knowledge of distressed property transactions is a skill that certainly gains prominence when the national economy is struggling (as it has been), but holds value at all times. It is a perennial skill. There will, unfortunately, always be areas of the country experiencing a downturn. There will always be former and future clients in your market who may face individual hardships over the years and will need your help at a difficult time. You will want to be ready for these situations.

This month's featured course is Short Sales and Foreclosures: What Real Estate Professionals Need to Know, which leads to the Short Sales and Foreclosure Resource(R) (SFR(R)) Certification. The course supports the ongoing demand for real estate professionals who know how to successfully navigate distressed property transactions for seller and buyers.

The course and certification give you a framework for understanding how to direct distressed sellers with confidence and compassion; both offer downloadable and digital resources that you can retain and access when you need to brush-up on any of the information as the need arises.

For more information, visit www.realtor.org.

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DISTRESSED PROPERTY TRANSACTION SKILLS ARE PERENNIAL

DISTRESSED PROPERTY TRANSACTION SKILLS ARE PERENNIAL

Cash Buyers Lists News​​​​​​

While foreclosures have decreased nationally this year to an 11-year low, there are areas of the country which are showing a surprising increase in foreclosure activity. This may be due to differences in the way specific regions are recovering from the great recession, or because of more recent impacts to local economies driven by things such as changes in oil prices.  As reported recently by REALTOR(R) Magazine, according to RealtyTrac and ATTOM Data Solutions, states seeing recent increases in foreclosure activity include (in order of increase): Delaware, Arizona, Utah, Connecticut, Oregon, South Carolina, Massachusetts, and Virginia.

The article also offers a visual heat map that you can review to see the changes in foreclosure activity in the specific areas you serve. And even while foreclosures have declined overall, there are still 1.4M residential properties nationally that have either been abandoned by their owners during the foreclosure process (so-called "zombie" foreclosures) or are bank-owned but still vacant-especially in Florida, Michigan, Ohio, Illinois, and Georgia. Banks are eager to get rid of these properties to help ease low inventory concerns.

Knowledge of distressed property transactions is a skill that certainly gains prominence when the national economy is struggling (as it has been), but holds value at all times. It is a perennial skill. There will, unfortunately, always be areas of the country experiencing a downturn. There will always be former and future clients in your market who may face individual hardships over the years and will need your help at a difficult time. You will want to be ready for these situations.

This month's featured course is Short Sales and Foreclosures: What Real Estate Professionals Need to Know, which leads to the Short Sales and Foreclosure Resource(R) (SFR(R)) Certification. The course supports the ongoing demand for real estate professionals who know how to successfully navigate distressed property transactions for seller and buyers.

The course and certification give you a framework for understanding how to direct distressed sellers with confidence and compassion; both offer downloadable and digital resources that you can retain and access when you need to brush-up on any of the information as the need arises.

For more information, visit www.realtor.org.

www.CashBuyersLists.com

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5 TIPS FOR BUYING FORECLOSED HOMES

Cash Buyers Lists News​​​​​​

Despite increases in home prices and a stabilizing housing market, many experts say the foreclosure crisis is far from over. But buying a foreclosed home is different from buying a typical resale. In many cases: 

• Only one real estate agent is involved.
• The seller wants a preapproval letter from a lender before accepting an offer.
• There is little, if any, room for negotiation.The home comes as-is, and it's up to the buyer to pay for repairs.

On the upside, most bank-owned homes are vacant, which can speed up the process of moving in.

"Buying a foreclosure is definitely a bit of a grind. It's not easy," says Robert Jensen, a broker in Las Vegas. "You're getting fantastic pricing, but sometimes it takes going through a lot of houses and writing a lot of offers to get the home you want."​

Get a Broker and Lender

The first two steps in buying a foreclosure should happen almost simultaneously: Find a real estate broker who works directly with banks that own foreclosed homes and get a pre-approval from a lender.  Elaine Zimmerman, a real estate investor and author, recommends that shoppers first visit any site with a database of foreclosed homes. You also could look at a local real estate website that lets you filter the results to see only foreclosures. You might find the acronym REO, which means "real estate owned" (by a bank, that is). This signifies that a home has been through foreclosure and the lender is selling it.

Get a Broker on Your Side

The goal of combing through foreclosure listings is not to find a house; it's to find an agent. Banks usually hire a few real estate brokers to handle their REO properties in a market. In a lot of cases, the buyer works directly with the bank's broker instead of using a buyer's agent. That way, the commission doesn't have to be split between two brokers.

"A lot of these REALTORS(R) have a long-term relationship with these banks, and they know of listings that haven't even come on the list yet," Zimmerman says. "Call them about the listings that you're interested in, but also ask them about listings that may be coming up because sometimes it may take a day or two or even a week before a listing actually comes onto the database."  In places where thousands of foreclosed properties are for sale, you might not get much one-on-one attention from overloaded agents. To prove that you're serious about buying, says Jensen, "right before or after you meet with the agent, meet with the lender."

Get a Pre-approval Letter

Unless you plan to pay cash, you'll need a recent pre-approval letter from a lender. The letter will describe how much money you can borrow, based upon the lender's assessment of your credit score and income.

"The problem is, buyers want to find the house first, and then they think they'll work out the financing," Jensen says. "But the problem is, the really good deals on these bank-owned, they go quick-and the buyer doesn't necessarily have time to try to work out the financing afterward. They need to work that out first." Zimmerman says some first-time buyers make the mistake of assuming that the bank selling the home will also finance the mortgage as part of the deal. "Don't expect to get financing from the bank that foreclosed on it," she says. "That's a totally separate transaction, and they view it that way. The people in the (bank's) REO department are not loan officers. They are getting rid of bad assets."

Pricing Depends on Sales Pace 

There's no rule of thumb on what the bank's bottom line is on price. Just as with any other real estate purchase, you have to look at the recent sales prices of comparable properties, or "comps."

Jensen says: "You really have to look at the comps in today's current market conditions and write a competitive offer based on that. Sometimes the bank prices the homes really low, and the home will have multiple offers over list price within hours. Sometimes it's priced too high, and you can come in lower. A lot of times, buyers will come to me and say, 'We want to write offers for half price.' It just doesn't work that way."

​Don’t Expect a Repair Discount

Keep in mind that foreclosed houses generally are sold as-is. Jensen says: "Let's say the house is listed for $200,000, all the comps are $200,000, and so the client comes in and said, 'Hey, look, I want to buy this house but I've got to do paint, carpet and fix some mold damage, so I want to take $15,000 off the price.' You know what? All the other ones were in the same condition, and they sold for $200,000."

Jensen further counsels to look at the "absorption rate for your product class." That means you should find out how quickly comparable houses are selling. In foreclosure, a 3,500-square-foot house with a pool in a gated community might sell within days or hours, whereas more modest homes might sit on the market for weeks.

If homes in your product class are selling swiftly, "the best advice on a bank-owned property is to come in at your highest and best, unless the property has been sitting on the market forever with no activity," Jensen says. "If you're going to be upset because you would have gone $5,000 more, but you lost the property, just bid the higher price in the first place."

Jensen and Zimmerman recommend getting to know trades people who can assess and repair damage from pests, mold and leaks.
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