New Project - follow the Reality of rehabilitating a foreclosure - not the Reality TV verstion

Here I am, back to the Blog finally. Life threw in some major curve balls recently but now it's time to share my newest challenge with you. If you, or one of your clients, has dreams of investing in and rehabilitating foreclosures and undervalued homes then this is a blog you and they may wish to follow. Those life curve ball sent out to a small town in the Praries but I started in San Francisco and San Diego so I plan to address this to big city and small town investors. This new project is a 4 Bed, 2 bath home built about 60 to 70 years ago. One a very tight budget (with lots of sweat equity) I plan to rehab over this summer, hopefully in time to rent or sell to someone moving to this small town in time to start the new school year in August. I've already brainstormed over 100 blog topics - here are a few of the topics - Budgets How to design a Kitchen without moving Plumbing and Electrical When to do it yourself and when to hire a Professional To Permit or Not to Permit - that is the question ! Why I love Formica How to install Kitchen cabinets by yourself Make your Neighbors your friends and you security guards Start inside and work you way out (weather permitting) How to maximize hardwood floors without blowing the budget Pick a Design and Color Scheme and don't change it ! Plus many more helpful hints and words of advice from my personal rehabilitation experience and being a Foreclosure Listing Agent for one of the major banks. I hope you share my blog with family, friends and clients - I guarantee everyone will learn at least one useful thing. See you at my next post - a few days at most. Roxinne

Great Article from Carla Fried

http://realestate.yahoo.com/promo/why-the-housing-market-is-three-times-worse-than-you-think.html

I am catching up on some market news today and came across this great article at CBS MoneyWatch written by Carla Fried.

Her best insight of all is “This is where a solid and straight-up real estate agent is going to be crucial. You don't want sugarcoating; you need an honest assessment of what's in your local pipeline.”

Since first licensed in 1995 I have lost numerous clients for being "too negative".

Often criticized by my previous Brokers I always answered that I'd rather sleep at night knowing I had given my best advice, rather than painting a rosy picture when there was no valid reason for optimism.

Thanks Carla for pointing out that "sugarcoating" should not be any part of the Real Estate information you're receiving.

Courthouse Step Buyers

Lots of activity on the courthouse steps and my gut feeling that investors are there in droves is being backed up by the sale results. On one website that handles dispositions for the big banks the numbers tell the story pretty concisely. On March 28, 29 and 30 the disposition company had 48 properties sold on the San Diego Courthouse Steps. Of the 48 properties sold 18 went to "Third Party" Investors and daring retail Buyers are researching and buying the foreclosures before they hit the local MLS listing service. If your considering buying Foreclosure bargains make sure you're working with someone who is keeping up with the current happenings. I'd love to help you. Contact me roxinne.mcphail@gmail.com if you want my help. Thanks

REO Activity Up

I have been checking one of the San Diego County Trustee Sale websites and have noted a marked increase in sales on the courthouse steps.
While the majority continue to go back to the beneficiary there are a surprising number going to Third Parties. And some of the Third Party sales are going at or near market value.
Does this mean an increase in Homebuyers taking the risk of buying on the Courthouse Steps or are investors willing to pay slightly more than they want to in order to avoid the purchase process once a Bank relists the REO's?
My gut feeling is that if a Buyer identifies a property they really want they are going to take on the additional risks on the court house steps and it doesn't matter if they are Homebuyers or Investors.
What does that mean for the market?
It means if a Buyer has a specific house, school district or zip code they are searching for then waiting for the REO to come to the market via a Bank assigned List Agent may mean too long a wait or too high a list price. some Buyers may think it's better to get a jump on it and buy it at the Foreclosure Auction.
Just make sure you know all the pitfalls of that process because the minimum bid may sound like a bargain but hidden costs (tax liens, repairs, and eviction) may mean time and money beyond what the buyer can bear.
Remember, Buyer Beware !!

A lot of my investor clients are stepping up the Courthouse Steps and starting to bid at the Auctions. Without an Agency Agreement I can't advise them on their actions or help them through the Auction purchase process but I do let them know that they are competing against very seasoned investors who are well versed in the pitfalls.

I recently received a short video from Shawn Harris at Stewart Title which gives an overview of some of the Title disasters that can go with a Foreclosure Auction.

go to www.youtube.com/shawnharristitle to find her "Risk to Investors on Courthouse Steps" video

I highly recommend you check out this 7 minute video if you want to know more about Liens, Title Insurance, Property Taxes. HOA issues, and Title Binders for a property that you buy on the Courthouse Steps.

She has several other Title related videos that may be helpful. Information overload is driving me crazy so I only pass on the very best and pertinent items I find. Hope you get something out of this one.

REO cleanup

I frequently am asked my opinion about when the REO mess will sort itself out. Being full of opinions I often give too much information - way more than the person wants or can absorb. Based on recent internet and news info it seems like we are in this for the long haul but for now I think I'll just stick to a more vague opinion "The REO mess will last quite a while" The optimistic me looks forward to Banks and the Government settling on one mode of resolution and then funding, staffing and setting procedures to achieve this. The pessimistic me knows that this is not a one solution problem and that we'll be working through this for years to come.

Debt Collectors and the REO mess

Many of my clients are feeling the pressure of delinquent mortgage payments. One client attempted a Short Sale, a Loan Mod and a Deed in Lieu. All three were denied so they threw up their hands and said "Foreclose" That was more than 3 weeks ago and yet the collection callers keep hounding them. The wife just called, crying, because the Debt Collector today "just wanted to update the file" for them. These are people who had not moved or changed their phone numbers for over 10 years. Frustration mounted when, instead of promptly answering her questions, the Debt Man kept saying "my system is slow" and turning it back to asking for her cell phone number. She hung up, in tears, and called me for help. In the moment, all I could do was listen. But later today I'll be going over to help them put something in writing to try and stop the calls.
I wonder what the long term mental health fallout of this is going to be. Sure, there are people "working" the system, but there are millions who have fallen on hard times and are nearing their breaking point. I do my best to treat them kindly and help them.