Foreclosure 101: They aren't the steal of a deal that Buyers think they are...

We sell a ton of foreclosures every year - last year approximately 375 of our listings that settled were BANK OWNED.

Because of our success in the Rozansky Realty Group with these properties - we get a number of referrals for Buyers who want to purchase a foreclosure. Now obviously the reason why they want to buy a foreclosure is because there is a misconception that there is instant equity when one successfully settles on a home that was foreclosed upon. Time and time again when meeting with a potential buyer for the first time, I try to explain that these homes are actually being sold for market value.

The banks are taking significantly losses on most of the homes that they now own and we sell. They are trying to net the most money from the transaction just like any Seller. The Asset Managers - employees hired by the Bank or Servicing Company - are not emotionally involved in the transaction. They don't care who buys the property, just as long as it settles (and preferably settles on time).

Now I can't speak for all of the companies out there - but from our experience it seems that most of the homes sell for around market value (what ever that is these days). There is a good opportunity on occasion for a buyer that intends to occupy the home to get a little sweat equity - but I don't see investors submitting offers in droves and able to flip the homes for double what they paid for it!

If you are obtaining FHA financing and buying a condo you must read this...

When purchasing a home many things come into play - most importantly what are you going to buy and how are you going to buy it? Are you using financing...if so then what type?

If the answer is that you are buying a condo and using FHA financing then this is vital information to have in your search - all condominium buildings must be approved by FHA. The only way to know if a potential community is approved for certain is to check on line with HUD (Housing and Urban Development) directly. If you have a good agent - like me - then they will do this on your behalf before you even go out to look at it! Who needs to fall in love with a place that they can't buy?!

The link to the website is: https://entp.hud.gov/idapp/html/condlook.cfm

Now, there is talk of FHA requiring all currently approved buildings to reapply but there have been no formal regulations passed yet...as always I will keep you updated as I find out more information.

The Bethesda BANK Foreclosure I wish we could sell…but we can’t…

There are several banks and servicing companies that hire our group, Rozansky Realty Group, to manage and market for sale their REO properties. REO stands for Real Estate Owned.

On occasion we have a Bethesda foreclosure – currently there are only 5 active foreclosure listings and 2 foreclosure listings that are under contract in all of Bethesda.

We have been managing a property for a Mortgage Servicing company – AHMSI – for almost a year and still can not legally put it on the market and make it available for showings because the previous owner left behind some personal property in the garage before we ever visited the house.

The process is complicated but here’s some basic “Foreclosure 101”

Two things can happen to the occupants and their belongings when a property goes to foreclosure:

1. If they currently reside in the property they can get evicted. An eviction is the removal of a tenant from a property owned by another person. In each state there are different laws regarding the actual procedure of having some one evicted. In an effort to oversimplify the process for our purposes – assume the property notice has been given to the occupants (tenants).

The Sheriff, as well as a representative of the owner (in our case some one from our office) and possibly a moving crew come out to the property and escort occupants out of the home and place all personal belongings on the curb for 24 hours (any remaining items left on the curb can be hauled away after the time period passes).

2. They can leave on their own terms before the posted eviction date. Some banks even offer a “Cash for keys” program in which they offer financial assistance to occupants in exchange for keys to the residence.

On occasion, occupants abandon a property and leave behind personal property. They might leave before we are able to make contact with them and there is no one way of knowing if they will come back. When they leave personal property (beyond trash) the bank or servicing company is forced to pursue a personal property eviction.

The particular property that I want to tell you about (but I can’t…at least yet) is stuck in that very personal property eviction stage. It has been there for a year!
It seems safe to assume if the previous owners haven’t come back for the small pile of personal items in the garage that they have managed to live with out for the past 365 days that they probably don’t want them. The foreclosure attorneys have advised that we are finally approaching the end of this process and hopefully will be able to market this home before the end of the year! It’s a pretty one in a great neighborhood…I will be certain to post more information as it becomes available.