REOs- The New Madness

REO (Real Estate Owned), also known as bank owned properties, are the new madness.  If you remember the madness of the real estate market in 2004-2006, the REO market of today is experiencing the same madness.

Buyers need to be ready, willing and able to make the transaction work.  Just like the ’04-’06 madness, having cash gets the deal done. Keep in mind that it takes more than just cash.  Low ball offers will not work to purchase a REO property. Most REO properties are priced well, and the banks are not looking at discounted offers. A buyer who insists on low balling offers is just wasting time and energy.  

It is a stressful process. Negotiations are difficult and tempers are short.  Buyers need to remove emotion from their purchase and think “strictly business”. Don’t plan on finding your dream home, but you will find a good deal on a home.  Who knows, you may get lucky and be able to make it your dream home.

In April 65% of sales in the Valley (metro Phoenix) were REO properties.  This is good news for reducing the inventory of homes for sale, especially for distressed properties.  As this inventory is depleted housing prices will stabilize.

Now for the bad news… With the government moratorium on foreclosures being lifted, expect to see another wave of foreclosures hitting the market in June.  Don’t waste a good recession.  Get out there and buy a home that is “on sale”.

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Susan Talarico’s Real Estate Blog

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Don’t waste a good recession!

It seems nearly impossible to pick up the newspaper, listen to news or pick up on a conversation that doesn’t stress how bad the economy is.  You hear about job loss, business failure, sluggish housing market and so on.   Even if you have not been directly affected yet, you will be.  For some, it can be a positive thing.  A recession is a great time to buy goods at a discounted price.  Cars, luxury items and houses are all great bargains now.  You can wait around and see if the market still goes lower on these items, but at what costs?  By the time we figure out we have hit the bottom, or the media “announces it”, you have missed the mark.  No one is going to ring a bell when we hit the bottom.  All economic indicators are showing we are mulling around the bottom and may have already hit the mark.  We see small improvements in some sectors of the housing market, especially in home prices under $500,000 in the Scottsdale, AZ market.  We are even seeing bidding wars for homes under $300,000.  Much of this is fueled by the first time home buyer tax credit of $8000.

Now is the time to “get off the fence” if you are looking to buy real estate.  Wouldn’t you hate to waste a good recession?

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