Category: REO Advice


How to buy a foreclosed home

In today’s market there are plenty of opportunities to buy foreclosed homes at a great price. A recent article by cnn.com lends a helping hands to buyers and gives advice for buying a foreclosed home. For any questions on this or additional advice our REO department has all your answers, call 516-798-3000 to become a buyer of an REO property. Check out the article:

Hoping to score a house on the cheap by buying a foreclosed property? There are good deals out there, but the process is complicated and risky. Here’s what you need to know.

There are certainly plenty of foreclosed homes on the market. In California, 40% of existing homes sold in the second quarter were foreclosures, according to DataQuick, a provider of real estate information, compared with 5.4% a year earlier.

Indeed, Fannie Mae CEO Daniel Mudd said Friday that the company is pushing hard to sell more foreclosed properties, to get them off the books. “I don’t think this is a time to be holding onto REOs and hoping for a better day,” he said.

Steve Dexter, author of “Prospering in the Rising Wave of Foreclosures,” has bought dozens of foreclosed homes and thinks now is a good time to dive in. “It’s the best way to buy, and it’s time to buy again,” said

There are three different stages of foreclosure, each of which presents different opportunities for buyers. The first step is to figure out which one makes the most sense for you.

Pre-foreclosure

A home goes into pre-foreclosure when a borrower has fallen behind on his payments, but the house has yet to be auctioned off.

Buyers can find pre-foreclosures by poring over the delinquency notices that lenders file with county courthouses when a borrower misses a payment.

Armed with prospects, buyers should go scouting. If they see homes they like, they should contact the owners to see if they want to sell.

“You call them or knock on their doors and say, ‘I know you’re having a problem and I think I can help you,’ ” said Alexis McGee, co-founder of Foreclosures.com.

McGee only buys when she figures she can make a profit of 30% or more; marketing and other expenses wipe out about half that by the time she resells. But people buying a house to live in might be happy with a 20% discount from market value.

Cold calling and making low-ball offers on people’s homes can be difficult: Some owners are emotional, even angry. Many are trying to hold onto their houses and don’t appreciate what they consider scavengers sniffing around.

“But you’re not taking advantage of these homeowners,” said Duane LeGate, president of HouseBuyerNetwork.com, which puts together buyers and sellers of distressed properties. “All many of them want is financial relief from bad mortgages, and you’re offering it.”

Indeed, some owners are open to doing what’s called a short sale, which is when a buyer pays less for a house than the mortgage that is owed on it. Lenders must agree to a short sale, and will then forgive the rest of the debt.

Often, banks are reluctant to do such deals, since it requires them to take a loss. It can take months and a lot of badgering before a deal goes through, and not every buyer is up for that kind of hassle.

But as the housing market deteriorates, lenders are warming up to short sales, according to Foreclosure.com founder Brad Geisen. “It makes a lot more financial sense for them to liquidate early rather than go through the foreclosure process,” he said, which can cost lenders about $50,000.

Gabe Cera recently bought one through an associate of LeGate, Raul Pineyro, owner of Cacophony Group Real Estate Services in Dade County, Fla. Cera purchased a four-bed, three-bath in Miami for about $60,000 less than what the owner’s mortgage was worth.

“I’m very satisfied,” Cera said. “The transaction was very smooth and quick and I think I saved a lot of money.”

In buying any pre-foreclosure, LeGate advises buyers to not be turned off by dirty carpets or ugly paint jobs. That’s where the best deals are.

“Anybody can go the Home Depot (HD, Fortune 500) and buy some paint and a new rug,” he said.

Sheriffs’ sales

In the next stage of foreclosure, homes in default are auctioned off on the county courthouse steps. These homes can be real bargains, but the process is a crap shoot.

Bidders can’t inspect the property, so there’s no telling how much work it needs. And there is also no telling what kind of liens there are against the home, due to unpaid taxes and so forth, which can also jack up the cost of these homes. Finally, Buyers need to come with cash, ready to put 10%-20% down on the spot, and able to pony up the rest in a matter of days.

“If you want to buy on the courthouse steps,” said LeGate, “you’d better be a pro.”

Even after a purchase, a deal can fall through if the current owner can come up with enough cash to repay the buyer the amount of the winning bid.

LeGate himself has bought several homes at auction, with mixed results.

“The first time, I bought, renovated and sold the house all within 29 days and made a killing,” he said. “I thought I was a mini-Donald Trump. The second time, the previous owner poured cement into the pipes before he left and when I turned on the water, it clogged everything. I lost more on the second house than I made on the first.”

Post-foreclosure

After a lender takes back a house, the property goes back on the market as what’s called an REO (real estate owned) property. These are treated like ordinary sales, listed with a broker. Typically, bargains are not as sharp.

Author Steve Dexter advises house hunters to go to the Web sites of all the major lenders and look for REOs in their communities. Alternatively, “Get a young, hungry real estate agent who’s screening REOs all the time and put them to work for you,” he said. Foreclosures for sale may also be found on the sites of Freddie Mac (FRE, Fortune 500) and Fannie Mae (FNM, Fortune 500), as well as eBay (EBAY, Fortune 500).

Dexter prefers to buy REOs because the process is so clean; the title is clear and the property is delivered vacant, even if the prices aren’t as good. He says one bank manager told him he usually sells REOs for 95% of listing prices, on average.

“You might not think that’s too great for buyers,” said Dexter, “but the listing prices are lower [than market value],” usually by 10% or more. The total discounts often exceed 15%.

Another way to buy an REO is through an REO auction. As bank portfolios of these properties have swollen, they’ve started to unload them en masse. Pam McKissick, chief operating officer of Williams & Williams, an auction company based in Tulsa, said her company buys big portfolios of post-foreclosure properties from lenders and then auctions them to individual buyers.

The REOs that Williams & Williams pick up are usually sold within 30 days; successful bids can be quite low. “It’s a very rapid process,” said McKissick, ” You want to put a family back into a home quickly and bring the neighborhood back. This does that.” To top of page

A Recent article written on cnnmoney.com has some real valuable information for home buyers. In our market today foreclosures are an everyday occurance but with some advice many people could avoid this dreadful process all together. At NyOnlineRealty we will personally take care of all of your questions and strive to put you in your dream home. Take a look at these helpful tips:

1. Don’t buy if you can’t stay put.

If you can’t commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner – even in a rising market. When prices are falling, it’s an even worse proposition.

2. Start by shoring up your credit.

Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.

3. Aim for a home you can really afford.

The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you’ll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.

4. If you can’t put down the usual 20 percent, you may still qualify for a loan.

There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a down payment as small as 3 percent of the purchase price.

5. Buy in a district with good schools.

In most areas, this advice applies even if you don’t have school-age children. Reason: When it comes time to sell, you’ll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.

6. Get professional help.

Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.

7. Choose carefully between points and rate.

When picking a mortgage, you usually have the option of paying additional points — a portion of the interest that you pay at closing — in exchange for a lower interest rate. If you stay in the house for a long time — say three to five years or more — it’s usually a better deal to take the points. The lower interest rate will save you more in the long run.

8. Before house hunting, get pre-approved.

Getting pre-approved will you save yourself the grief of looking at houses you can’t afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.

9. Do your homework before bidding.

Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that’s about eight to 10 percent lower than what the seller is asking.

10. Hire a home inspector.

Sure, your lender will require a home appraisal anyway. But that’s just the bank’s way of determining whether the house is worth the price you’ve agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.

 

Good Morning:

          

           In today’s fast-moving world it’s no longer enough to be on the cutting edge of change. The world is changing so fast, that to be truly successful you must stay ahead of change. We have just opened our new state-of-the-art facility and are in the process of improving our marketing plan to better service your company’s needs. We continuously work on the sale of Bank Owned Properties (REO’s) and do so successfully. We are the Foreclosure Management Specialist.

 

Each of us need the assistance and cooperation of others to reach our goals. NyOnlineRealty.com is that assistance. With your cooperation and our precise expertise in Foreclosure Marketing, we will both achieve our common goal to expediently and effectively transform your REO’s into working capital. In this ever changing market you need a professional who concentrates only on the marketing of REO’s. NyOnlineRealty.com is committed to the highest standards of professionalism and customer service. Our track record is impeccable and our service is outstanding. Our efforts on your behalf, will be to obtain the maximum market value in the least possible time. What does this mean to you? It means getting your properties SOLD and SOLD FAST!!!

 

Communication with you and your company will be on a consistent basis. The SALE of your Bank’s REO’s will be my prime responsibility supported by the NyOnlineRealty.com team. If your interested in turning your REO portfolio into working CAPITAL, Try us, You’ll Like us! My telephone number is (516) 798-3000.

 

 

TAKE ACTION TODAY!

 

Mark R.A. Arenella

“Mr. Destiny”

Lic. Broker / Owner

 

P.S. “The Future Belongs to those who Persistently Stretch out to see in it.”                                   

NYOR REO BUSINESS MODEL

 

REO SOLUTIONS

 

NyOnlineRealty.com is the COMPLETE REO

SOLUTION that Provides Professional R.E.O. Services from A to Z.

  

We are a full service real estate agency that is solely dedicated to serving banks and lenders throughout the World in the managing, marketing, and liquidating of their REO Properties. Our years of Experience enable us to deliver the very best service and guidance to our valued clients under any circumstances and at any stage, from delinquent note valuations to fast sales and liquidation.


We are strategically located in the heart of our service area, allowing us to keep a very close eye on each and every one of our clients’ assets at all times.

 

NyOnlineRealty.com  is New York’s Complete R.E.O. Solution because of our seamless synchronization of all aspects of default asset management.

PROPERTY VALUATIONS

 

To ensure the highest return, we inspect and evaluate all properties in a timely manner. Every valuation performed is reviewed to ensure that the individual client’s requirements and standards have been met. Appraisals, BPO’s and CMA’s can be customized to accommodate any clients needs. Reports can be provided on our form, or on any valuations and photos can be faxed, e-mailed, uploaded to your web site and priority mailed to you within your time frame. We understand your need for obtaining values or foreclosure sales, short sales and secondary bidding in 24 hour period. We are here to provide you with the best possible service we can.

REO SERVICE

 

New York Online’s REO experts have designed a program to achieve the fastest sales and expedite contracts to a closing process. This will ensure you to maximize the value of REO assets and minimize loss.

 

Our staff of Real Estate Brokers are qualified and experienced in REO sales and services. They will secure, inspect, and evaluate all REO properties within 24 hours. Our staff will conduct an analysis of occupants status and offer “cash for keys,” or coordinate evictions with attorneys. Occupied properties will be managed including tenant selection, leases, rent collection, maintenance and repairs. Property preservation and maintenance will include initial and weekly inspections, re-key, winterization, clean outs, routine cleaning, landscaping, cosmetic and general renovations. We will perform a cost to benefit analysis for any repairs or rehabbing.

 REO 5 STEP MARKETING

Step 1: Property Evaluation and Setup

 

· Inspect and secure property

· Evaluate property condition

· Initiate independent market analysis

· Obtain bids for repair and maintenance.


Step 2: Marketing

 

· Establish marketing strategy with financial projections

· Select listing broker

· Review strategy and pricing every 30 days.

 

Step 3: Reporting

 

· Provide you with monthly reports on both a summary and individual property basis regarding inventory flow, unsold inventory, properties under contract, sales and property expenses.

· Provide year-end summary reports

· Retain records for five years

 

Step 4: Property Management

 

· Supervise repairs and maintenance

· Monthly inspection reports

· Select property manager when applicable

· Address environmental and compliance issues.

· Payment of property utilities (optional).

 

Step 5: Negotiation and Closing

· Counter, reject or accept offers within approved limits.

· Provide detailed net sheet with all offers.

· Coordinate closing process

· Remit sales proceeds

· Ensure that utilities  and all transfers have occurred.

· Submit detailed closed file.