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Many Properties in Multiple Offers Right Now

March 30, 2012 By Leave a Comment

There are a number of properties that are in multiple offer situations right now.  I’m working on a bank deal right now and we don’t know the final tally, but we know for sure that there are 10 offers on the property.  That was within the first four days the property was on the market.  It’s a newer town home in Maple Grove priced under $110,000.  If it were priced at $120,000 it would not have garnered nearly the interest that it has just $10,000 lower.

Any home can be sold.  It’s all about value.  It’s not about the marketing.  Trust me.  When you see the “marketing” that the REO (real estate owned) agents do, you will know that marketing doesn’t sell homes.  Is it priced aggressively?  Is it on the MLS?  If so, it will sell.

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Banks Are The New Airlines

March 28, 2012 By Leave a Comment
Passengers look for bags in New York - Airlines

Photo: MSNBC NY LaGuardia Airport

Remember when the airlines absolutely sucked?  (Pardon my language but how else to describe?)  Remember how awful the customer service was in the airline business in the 1980′s and 1990′s.  They seemed to have no care for their paying customers.  Service was terrible.  Response times were terrible.  Few if any seemed to go the extra mile to take care of an issue.  It was terrible.

Well I think the banks are the new airlines.  And when I mean banks, I don’t mean the front end of the banks – the retail side.  Those are some of the nicest, most polite and pleasant people you’ll ever meet.  I’m talking about the REO (real estate owned) and foreclosure side of the house.  The communication is stunningly poor and ineffective.  They are unresponsive.  There is no appreciation for those of us in the field trying to “get things done” for our buyers on their properties.  We are on an “as needs to know” basis and when we need a response, it might be days to get something back from them.  However, once they send us something they DEMAND that it be turned around in 24 HOURS or the deal is potentially DEAD.

It’s difficult to know where the problem lie exactly.  It could be the bankers themselves or it could be their asset managers that they’ve hired to “dispose” of their housing inventory.

They are now costing my buyers money because of their unresponsiveness and lack of attention to detail.  The latter has really been incredible lately and it’s amazing anything gets done.  If you’re reading this as an end consumer, you may not care in a broad sense what real estate agents get paid to put these deals together, but I would hope you care about your own particular agent.  Freddie Mac has started to cut commissions to Realtors now I guess perhaps because their deals are so easy that Realtors shouldn’t get paid their 3% :)

Freddie Mac

Currently I’m working on a Freddie Mac property where they misspelled my buyers name.  It’s a common name and they added a letter that should not have been there.  They have to send it back to be revised.  That was last Friday.  It’s now Wednesday afternoon…5 days later…still no revised contract.  It has to work its way through the bureaucracy for one letter!!!  Meanwhile, this is costing my buyer money as interest rates slowly tick higher.

I’ve had other dealings with Freddie Mac and they would definitely get my vote as the worst bank in America to buy a house from.  Bank of America might be a close second after the debacle I am currently working through right now.  There are plenty of characters who might, on any given day, might earn the award of being the worst bank in America when it comes to buying REO property.

One thing is for sure, these parts of the banking business and asset management business charged with disposing of these properties must have taking their customer service training from the same folks who trained the airlines many years ago.

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Fannie Mae’s REO Inventory Declined by 27%

March 2, 2012 By 1 Comment

Fannie Mae REO inventory declined by 27% in 2011.  Fannie Mae is the government sponsored entity that buys mortgages on the secondary market.  REO stands for real estate owned and that term is specifically used for bank owned property that is taken back in a foreclosure.

27% decline is a massive drop in inventory.  Fannie’s current REO inventory stands at 118,500 properties.

According to the Housing Wire story:

For the first time since the collapse, Fannie sold more REO than it repossessed. In 2011, the government-sponsored enterprise acquired nearly 200,000 properties and sold more than 243,000, the most in the company’s history.

They also go on to note that the concentration of REO properties is in California and Florida:

More than 23% of the Fannie Mae REO inventory is located in California, the most of any other state at the end of last year. The next closest is Florida, at 11.5%.

Lastly, Fannie Mae continues to collect only about 55% of the unpaid principal balance that was left on the loan before it went to foreclosure:

Fannie vendors continued to sell REO for slightly more than half of the unpaid principal balance left on the loan before foreclosure. In 2011, REO net sales price equaled roughly 55% of the UPB on the loan, down from 57% the year before. In 2006, it was 83%.

While these numbers still tell a grim story about the housing market, the key information is that at least for now, the trend appears to have turned and is moving in the direction of a healing market for housing.

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Twin Cities Foreclosure and Short Sale Report Through December 2011

January 22, 2012 By Leave a Comment

Check out the latest from the Minneapolis Area Association of Realtors with regard to Foreclosures and Short Sales in the Twin Cities.  The big take aways are that inventory is falling in all segments – traditional sellers, foreclosures, and short sales.

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Plymouth, MN Foreclosure Inventory Dreadful – Fewer Than 20 Properties for Sale

August 15, 2011 By 1 Comment

There has been lots of press lately about the declining inventory of bank owned property as well as notices of foreclosure across the country as well as in the Twin Cities.  Banks have absolutely driven the market the past 3 years but perhaps that tide is about to change.  If inventory is any judge, that may be the case.

I just looked at the bank owned inventory in Plymouth, MN and all I can say is it’s dreadful!  There are only 18 properties currently for sale.  2 of them are under contract right now.  A total of 10 are single family homes and 8 are townhomes/condos.  None of them are over $300,000 with the exception that one of them is an auction property that should sell for well over $300,000 when it’s finally auctioned.  (The last purchase on it was a few years ago for over $900,000).

If you’d like this search that I just ran, please send me an e-mail and I’ll forward it to you on e-mail.  Otherwise, I’ve set up a custom search for Plymouth bank owned properties.

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Redevelopment Plan Proposed for North Minneapolis After Tornado Destruction

July 12, 2011 By 2 Comments

Anyone who has spent much time in North Minneapolis, or at least read about it, knows that it is a very troubled area infested with run down buildings and high crime.  The tornado that came through North Minneapolis 6 weeks ago severely damaged many, many buildings.  Lots of the buildings are bank owned.  The challenge has been what to do as far as fixing all the broken and damaged properties.

Now the City of Minneapolis is considering making this a redevelopment project complete with tax increment financing.  Perhaps this will be a good opportunity to start over in a large part of North Minneapolis.  I know there are upstanding citizens who continue to live there despite the crash in home values and ongoing criminal activities.  Part of me says they should bulldoze block after block but what do you do with those long time residents who really want to stay put?

It will be interesting to see how this develops.  One big question is what will happen with all the criminals?  Where will they be go if this gets redeveloped and they get pushed out?

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Is This Really a Buyer’s Market?

April 26, 2011 By 1 Comment

The news today is more of the same…Case-Shiller Index points toward double dip in housing.  That might be so, I don’t know.  Are prices soft.  Yes.  Is it difficult to sell a home today?  It depends.  Where is it located?  What’s the price point?  How updated is the home?

Here’s the challenge for the market concerning inventory particularly in some of the bigger, more populated western suburbs of Minneapolis:

  • 5-10% are BANK OWNED and are THE HOTTEST properties on the market – BUYERS GO HERE FIRST
  • 10-20% are SHORT SALES – generally these properties might be in some disrepair.  There is lots of uncertainty as to what the bank might actually accept for the property.  They stay on the market a long time and are a real drag on the overall market causing more pain for traditional sellers.
  • 70-80% are TRADITIONAL SELLERS who can actually sell.  The problem is at best one out of five are priced well and in excellent, updated condition.  Buyers today aren’t looking for fixer uppers unless they are investors.

So, what happens when you’re out showing property?  We look first at the BANK OWNED homes as they generally represent the best deals in the market.  We then very selectively choose some of the TRADITIONAL SELLERS to go see IF the home is priced decently and IF it appears to be nicely updated.  The others sit.  SHORT SALES…for the right buyer with a certain pain threshold and tolerance, we’ll go take a look…if only to have some fun just to see what it looks like.  We then have to factor in the difficulty and likelihood of getting a deal done.

So all of that is the precursor to the article I saw in The Wall Street Journal today entitled, “Buyer’s Market?  Stressed Sellers Say Not So Fast?“  Everyone thinks it’s a buyers market until they try to put an offer in on a house.  Often times those homes are ending up in multiple offer situations today.

Here’s a quote that readily articulates the biggest challenge in today’s market:

Many sellers may be unable or unwilling to lower their home prices – mostly because they may be underwater on their mortgage – so buyers are increasingly finding lower offers than list price denied.  Buyers, on the other hand, may be reluctant to agree to a deal if they don’t feel like they are getting it at a deep discount, industry insiders say.

If you are a TRADITIONAL SELLER and you do have the equity and financial wherewithall to sell, please don’t fool around with your asking price by pricing it over the market.  You will hurt yourself in the end with a lower sales price.  Price it right immediately.  If you and your agent get it wrong (and you’ll know almost immediately with the exception of luxury properties), then adjust your price quickly.  Your home is worth the most those first few days on the market.  As days on market increase your value drops accordingly.  Best to err on the side of being overly aggressive on your price – i.e. at or just below market.

For more on pricing your home properly, please see my video (albeit not high production quality) on pricing your home properly in today’s market.  You’ll at least get the point I’m making.

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32% of New Listings in Hennepin County Last Week Were Distress Sales – Bank Owned or Short Sales

January 24, 2011 By Leave a Comment

One of the things I will try to be more diligent about is to publish data on new listings as it relates to traditional sellers, bank owned property and short sales.  For the week of January 17 – 23rd, 2011 in Hennepin County, there were 397 new listings that came on the market.  The listing inventory broke down as follows:

Total listings: 397

Bank Owned: 78

Short Sales: 49

Non-distress: 270

Distress sales have been taking more and more marketshare the past couple of years in the Twin Cities market.  It’s expected that the number of foreclosures and short sales will continue to increase in 2011.

Source: RMLS 13 County Metro – Hennepin County, new listings from 1/17/11 – 1/23/11.  Search performed by John Murphy, RE/MAX Results

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Plymouth, MN Bank Owned List – 20 Homes For Sale

May 11, 2010 By Leave a Comment

There are currently 20 banked owned properties for sale in Plymouth, MN right now.   These are not short sales, but rather they have gone all the way through the foreclosure process and are back on the bank’s balance sheets.   These are much easier to buy than a short sale, but the buyer’s must beware that often times they may be in competition with others and the banks tend to price their properties on the low side in order to get multiple bids and sell the properties quickly.

For a free list of bank owned homes in Plymouth MN visit www.PlymouthBankOwned.com.

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Fannie, Freddie, & FHA REO Properties

March 1, 2010 By Leave a Comment

Calculated Risk has an excellent chart showing the continual growth in REO (real estate owned) properties at Fannie Mae, Freddie Mac, and the FHA.   The foreclosures clearly have  not yet peaked.  I’ve also heard on the street that the loan modification program is not helping as many people as the government had hoped.  It appears that has just merely delayed the inevitable foreclosures.

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