Brewster Property-and more-Have Sold

November 13, 2012

Cape Codder Hotel

Happy 2013! I’ve been asked about the status of the Brewster house and barn in the June 26th post, and happily it is sold.  As mortgage rates hit historically low rates, properties on Cape Cod that are priced correctly and Staged are being snapped up quickly.  Land is beginning to move again as well.  Four homes in  my immediate area sold recently for surprisingly high prices. In the third quarter of 2012, days on market for residential property decreased only 2.6% over the previous 3rd quarter, and median values decreased nearly 7%, but volume sold is up over 19%. See the entire report here.


Anatomy of A Foreclosure

December 22, 2008

Although not a cheery holiday subject, foreclosure presents itself as an opportunity for some and a tragedy for others at any time of year. The new Administration may soon rework all of the regulations relating to foreclosures and short sales, so stay tuned. The following is from one of my professional organizations, REBAC and is appropriate at this time. The best advice is still, “Don’t try this at home!” or without a qualified Buyer’s Representive. It’s a nightmare for even the most seasoned professional, I promise. Your state laws may vary. More information to follow, and keep and eye on the new Housing Secretary.

Foreclosure Process

Foreclosure is a process that occurs over a period of time, involving three major stages. Interested homebuyers can make a purchase offer and potentially acquire property at any point in the foreclosure process. However, there are different variables to consider at each stage, and different parties involved, depending upon how far the home has proceeded down the path towards foreclosure.

Stage 1: Pre-foreclosure
When homeowners default on their mortgage, their property is considered to first be in a state of pre-foreclosure. Lenders are typically quick to respond to that first late payment, with phone calls to the borrower.

How the foreclosure process actually proceeds from this point forward varies greatly from state to state. It’s important to know, for example, how your state determines property ownership prior to foreclosure, since this largely dictates which steps will be taken and how long each step will take.

Buyers may find that properties that are in the pre-foreclosure period are attractive investments. While it’s unlikely that a highly discounted price can be negotiated, especially for desirable properties, there are several advantages to purchasing at this stage.

First, there may be less competition from other buyers before the property is put up for public sale. Also, if your agent approaches the current homeowners with sensitivity to their situation, you’ll improve the odds that a cooperative agreement can be reached, eliminating many of the problems and uncertainties that make purchasing foreclosure properties in auction sales a risky business.

Stage 2: Sale/Auction
If the lender and borrower are unable to work out a solution during the pre-foreclosure stage, the lender will take steps to sell the property to new owners. Following a notice of sale, a foreclosure property is typically listed for sale at auction. The timing and procedures of these sales vary by state and, to some extent, sales terms will be determined by the lender. For example, an auction can occur through a public sheriff’s sale, or through a private party. Some lenders may even opt for a short sale, which means the property is sold for less than the amount of money owed, simply to remove a non-productive asset from the books.

Frequently, the best bargains in distressed properties can be found at auction sales, although numerous pitfalls can be encountered. First, it’s fair to say that you probably won’t have complete information about what you’re purchasing. Because defaulting homeowners frequently still occupy the home at this point, and are not likely to open their doors to show you around, you won’t be able to see beyond the exterior, much less bring in inspectors. In this type of sale, there are no requirements to disclose flaws; properties are sold “as is,” without any warranties.

It may also be difficult to determine if there are any old debts that could surface later as liens on the title. For example, you may become obligated to settle with the contractor who put a new roof on the home, but was never paid. And if the old homeowners still occupy the home, you’ll have to contend with the awkward business of evicting them, facing the additional risk that they will damage the property before they vacate.

Another challenge can be paying for the home. Usually, public sales require cash payments, meaning that your financing will need to be in place well in advance of the auction.

Stage 3: Real-Estate Owned (REO)
If a foreclosure home does not successfully sell at auction, it moves into the lender’s inventory and is considered a real-estate owned (REO) property. Generally speaking, lenders don’t like to hold non-performing assets, especially ones that require upkeep and maintenance, so they may be motivated to sell. At the same time, lenders still want to maximize their profits and are unlikely to accept deep discounts.

Buying foreclosure property at the REO stage is typically the easiest and most straightforward approach. Many of the risks that are present at the auction stage have now been eliminated. However, the potential return on your investment has also been reduced. On the other hand, expenses such as taxes and liens, that aren’t generally covered in an auction sale, may be covered by the lending institution in an REO sale.

If the home is held by a smaller bank, you and your buyer’s rep may be able to negotiate a purchase directly with the lender. It’s more likely, however, that you’ll be working through an outside real estate representative who has been retained independently by the bank.


Why Use A Buyer Representative?

May 2, 2008

Lately I have participated in real estate forums on Boston.com and it is evident that some buyers do not understand the way that buyer agency works ( in Massachusetts) or the very obvious need for buyer representation. This is a huge topic, and I will just touch on the issue here, and welcome discussion. I myself enjoy working with buyers, although it can be a very time consuming process. I’m not in real estate for a per hour paycheck. I’m not put off by today’s tech-savvy buyers who do their initial research on the web. It’s a collaborative process, in the best situations.

I’ve been told that buyer agents just open the door and collect a check. That’s a pretty myopic view. In Massachusetts, a buyer’s agent owes the buyer undivided loyalty, reasonable care, disclosure, obedience to lawful instruction, confidentiality and accountability, provided, however, that the agent must disclose known material defects in the real estate. The agent must put the buyer’s interests first and negotiate for the best price and terms for their client, the buyer. This is a huge liability and responsibility! Remember that real estate agents are licensed professionals. There are other types of agency as well, I have described Buyer’s Agency.
I know I’ve said this before, but remember that not all “agents” are “Realtors.” Realtors are members of their professional organizations at the National, State and Local levels, and adhere to Codes of Ethics.

You may not know that some Realtors go even one more step beyond in representing buyers. I am accredited by the Real Estate Buyers Agent Council or REBAC of the National Association of Realtors. This special accreditation requires classroom instruction and on-the-job experience with buyer transactions.
So what will your Realtor do for you when you buy? I have researched deeds, wetlands, septic plans, zoning issues; attended inspections, hired contractors, negotiated price and conditions and terms; coordinated lenders and documentations; obtained necessary insurance documents and tax information and so much more. Who paid for all this? In each case, the Seller paid a commission to the listing agent, who then offered a co-fee to the buyer’s agent through the cooperation of the multiple listing service. But you may enter into a contract with your Buyer Agent to pay a fee directly, as in the case of buying a For Sale Buy Owner (you still need your own Realtor!) Want to explore this more? Click on My Website and write me. Happy House Shopping!


%d bloggers like this: