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By Eamonn Curley
Foreclosures and Shorts sales now amount to a very high percentage of all sales in States such as our current speciality – Florida and our newest Foreclosure market, Chicago.
Foreclosures occur where the holder of the mortgage, typically a Bank has a client with either significant arrears on the mortgage, perhaps the client has simply handed the property back to the Bank or the mortgage holder has simply abandoned the property altogether. It is like all things a process, most mortgages in the United States are non recourse to the borrower and so the stigma that would be associated with such a scenario in Britain or Ireland is not present. It is in fact typical and widespread, morally the mortgage is owing, in practice the debtor walks away suffering a poor credit rating that will stalk their lives for up to seven years or more but force them into renting and is therefore a double edged opportunity for investor buyers of suitable properties as the rental pool is increasing from people exiting their mortgages through foreclosures.
Short sales are sales where the property owner seeks permission from the lender to effectively allow the owner to sell the property to a willing buyer for less than the amount owned on the property, statistics indicate that in March Short sales accounted for almost 19.6% of sales nationally and are now a very large part of the housing landscape in the U.S.
Buying foreclosed property and its pitfalls have been covered in my previous posts and in this one I’d like to outline the process some more as it relates to Short sales in Florida and Illinois.
Short sales require the lender’s agreement and therein lies a problem borne out directly by our own experiences at Foreclosed Property Florida.. getting a Bank to voluntarily accept that the property owner has located a willing buyer at a fair price is almost always treated with mistrust. Bank approval is a long drawn out affair taking mostly months and regularly up to as long as one year, often much longer. This locks up the capital of the willing purchaser who should have closed on their investment and had it rented up and performing long before that time had elapsed.
Lenders are slow to act on Short sales and their systems cannot cope easily with access to the lender usually through a toll free number to a call centre where you get a different person every time and never a decision maker or a person who will assume responsibility to deal with the issue raised, correspondence is of the long hand written variety as most lenders do not utilise e-mails and all that before you realise that you need as a seller or buyer to have the services of a Estate Agent ( Realtor ) who must be prepared to work tenaciously and tirelessly on your behalf for an indeterminate time.
Short Sales will get easier over time as all parties react to changing times but for the next couple of years avoid Short Sales and do not be tempted by the low sales prices you see advertised, these are not real, they cannot be secured even if paying the sticker price in cash, be prepared to have your capital tied up indefinitely as you await a decision.
Isn’t it much better to buy foreclosed property through a reputable agent who has secured a unit that is re-painted, re-carpeted with all appliances, air con included and free of all liens and encumbrances on Title. A pre-vetted, pre-qualified tenant awaits you before you are asked to close, I probably should stop before I tell you that all our units are cash flow positive, check out the website for details or call / e-mail our office.
By Eamonn Curley
Orlando’s metro area once again topped all other locations across the state of Florida during the third quarter of 2010 in the percentage of foreclosed homes among its home sales, according to a report by the research firm Realty Trac Inc.
Almost 50% of the four county metro area home sales were foreclosed homes, this is a reflection of the demand from multiple sources domestically and Internationally for real estate at what is considered bargain basement prices that frankly will not last, this compares to about 35% of all sales in the State of Florida and 25% of all sales nationwide.
During the previous quarter there were almost 6000 foreclosed homes sold in Orange, Seminole, Osceola and Lake counties, second in Florida only to the Miami / Fort Lauderdale / Pompano Beach metro area, which had almost 11700 foreclosed homes among its home sales, or 34 percent of the total, California-based RealtyTrac have reported.
By Eamonn Curley
Repossessed property better known as foreclosed property in the United States will reach record levels for 2010, according to some of the top U.S. real estate sites such as Trulia and RealtyTrac 2010 will be another record year for foreclosure activity with three million homes listed in a foreclosure filing across all 50 states, this is up from 2.8mn last year.
Whilst this presents a distressing position for many people it should be remembered that a large majority of people in the States will simply walk away from a property when in negative equity, that seems amazing to us based out here on the edge of Europe but it is true, yes many people do lose their job and their home and that is an unfortunate reality of life everywhere but there are also professional investors who got in at the wrong level, maybe got greedy with multiple units all geared up and you know the rest.
By Eamonn Curley
We have always heard the mantra that when it comes to property that there are three important factors, location, location and location, whilst these are important and should never be overlooked there are some other important aspects that should be considered with any property purchase that depending on your viewpoint as an investor are either more or less important, lets take a look at some of these.
By Eamonn Curley
Orlando’s repossessed property market continues to attract worldwide interest, I will admit that the new Wizarding World of Harry Potter at Universals islands of adventure does draw a more diverse audience than those interested in repossessed property; that said this multi million dollar attraction is such a positive sign for the Orlando economy and for the creation of literally 100’s of additional jobs in this theme park and other parks across this part of Florida..
By Eamonn Curley
We had a client in our office recently, a very sensible middle aged man, we talked about the unit we sold him in Chicago’s downtown Loop area and how great that City was, he particularly liked the food and people, he was also very complimentary about the management of his asset and generally all was well in his world, As we concluded our conversation he told me that he was changing his car and had narrowed his choices to a BMW 5 series Touring or a Mercedes E Class coupe, I wondered was it just me that was thinking mid life crisis…
By Eamonn Curley
Ok. Admissions first, my father in law is indeed a tad wiser than myself declaring as he did what I guess could vaguely be considered support for his son in law who together with the rest of the established team at Castleroc Estates in Harcourt Street have come to agree using our combined experience in the U.S. markets that yes there is a great deal of sense in seeking out foreclosed property for sale once you get the basics right and work with the best people possible, let me explain further.
On our side of the world we rarely see or hear of foreclosed property for sale, the term foreclosed itself is uncommon, I worked for a Bank for most of my adult life and cannot recall the term in use. So what is foreclosure and why should a person want to buy foreclosed property?
