Foreclosures - Feb 15th 2012

[Travis Munroe]

Contact me to see any of these foreclosure/bank owned properties in Calgary.
Buying a foreclosure does not have to be much different than a standard purchase. It is important to have a realtor with experience in foreclosures to protect you throughout the buying process.
I have taken the basic and advanced course offered by CREB, represent BMO and Scotia in selling their bank owned properties and have assisted in the purchase of foreclosures to numerous clients.


0-170k
http://abmls.mlxchange.com/DotNet/Pu...49&s=ALB&t=ALB

170k-250k
http://abmls.mlxchange.com/DotNet/Pu...64&s=ALB&t=ALB

250k-300k
http://abmls.mlxchange.com/DotNet/Pu...33&s=ALB&t=ALB

300k-350k
http://abmls.mlxchange.com/DotNet/Pu...82&s=ALB&t=ALB

350k-400k
http://abmls.mlxchange.com/DotNet/Pu...16&s=ALB&t=ALB

400k-500k
http://abmls.mlxchange.com/DotNet/Pu...88&s=ALB&t=ALB

500k and up!
http://abmls.mlxchange.com/DotNet/Pu...50&s=ALB&t=ALB

[ranchlandsselling]

I always look - but I don't often see value that's different than maybe the usual listings. Or, the ones that might have better value (crappy shape ones) don't show any pictures so I'm not as intrigued.

What would make the foreclosures more interesting is a back story.

"This wonderful bungalow, on a busy street, in poor shape, beside a dirty 4-plex was purchased by a couple that thought they'd flip it in 24 weeks and make a killing. Unfortunately when the price declined from $400,000 by 15% and they couldn't make the payments anymore they vanished. Glad we approved a 35 year mortgage for 95% at the time, now that it's at 85% of what we originally underwrote it at and a 105% LTV we're listing it for a steal at $390,000. Although there's some weird stipulations about coming to see it and we've got one picture of the front from 2008.

"This beautiful home in Aspen was "supposedly" purchased for $1,200,000 newly constructed in 2008. We say supposedly because we're now not sure how a guy with stated income of $600,000 annualy, 2 luxury SUV's, a boat, suddenly couldn't afford it anymore and vanished. Our lawyer, broker and BMO underwriter all checked it out. If you google street view it to get an idea of the neighborhood you'll notice the previous owner drove a Large H2 and a Porsche Cayenne. This shows you it's a classy neighborhood! If you can't imagine how wonderful it would be to live in this neighborhood go ask the neighbors. They'll rave about how much the prior owner, a real modern day hulk hogan and his 2 pit-bulls loved the quiet street, enjoyed sitting outside with the dogs, enjoying the west facing backyard and sunsets. If you come for a tour you can actually see plenty of his stuff laying about and see the lifestyle he enjoyed so much. Only $1,099,999"

[Superflyer]

Can you explain a foreclosure to me? I know that they are properties that the bank is trying to sell for one reason or another but other then that I am not sure.
I have heard that they are selling foreclosures for just what is owed to them and I have heard they sell them for as much as they can. Not sure which is right.
Also I have heard that you have to pay the full amount and that it is just like a regular mortgage, once again I am not sure which is right.
Thanks

[Travis Munroe]

Originally Posted by ranchlandsselling

I always look - but I don't often see value that's different than maybe the usual listings. Or, the ones that might have better value (crappy shape ones) don't show any pictures so I'm not as intrigued.

What would make the foreclosures more interesting is a back story.

"This wonderful bungalow, on a busy street, in poor shape, beside a dirty 4-plex was purchased by a couple that thought they'd flip it in 24 weeks and make a killing. Unfortunately when the price declined from $400,000 by 15% and they couldn't make the payments anymore they vanished. Glad we approved a 35 year mortgage for 95% at the time, now that it's at 85% of what we originally underwrote it at and a 105% LTV we're listing it for a steal at $390,000. Although there's some weird stipulations about coming to see it and we've got one picture of the front from 2008.

"This beautiful home in Aspen was "supposedly" purchased for $1,200,000 newly constructed in 2008. We say supposedly because we're now not sure how a guy with stated income of $600,000 annualy, 2 luxury SUV's, a boat, suddenly couldn't afford it anymore and vanished. Our lawyer, broker and BMO underwriter all checked it out. If you google street view it to get an idea of the neighborhood you'll notice the previous owner drove a Large H2 and a Porsche Cayenne. This shows you it's a classy neighborhood! If you can't imagine how wonderful it would be to live in this neighborhood go ask the neighbors. They'll rave about how much the prior owner, a real modern day hulk hogan and his 2 pit-bulls loved the quiet street, enjoyed sitting outside with the dogs, enjoying the west facing backyard and sunsets. If you come for a tour you can actually see plenty of his stuff laying about and see the lifestyle he enjoyed so much. Only $1,099,999"

Some foreclosures are over priced, some under priced and some right at market value. The ultimate deal is had in the negotiations. A bank is much more willing to negotiate than say the owner of a property who has sentimental value with the place.
If a foreclosure is at or slightly above market value it may sit around for a couple months as the bank is only looking at close to asking price within the initial listing period. After a couple months goes by the bank is much more willing to look at any offers.

To be honest, there is a ton to know about foreclosures.
Also, a difference between bank owned and court of queens bench properties which is so in depth I am going to save the explanation for another night.

[Travis Munroe]

Originally Posted by Superflyer

Can you explain a foreclosure to me? I know that they are properties that the bank is trying to sell for one reason or another but other then that I am not sure.
I have heard that they are selling foreclosures for just what is owed to them and I have heard they sell them for as much as they can. Not sure which is right.
Also I have heard that you have to pay the full amount and that it is just like a regular mortgage, once again I am not sure which is right.
Thanks

Look at it as any other property and with the bank being a typical seller.

List price is based on a realtors market analysis and a appraisal.
Time on market dictates how willing the bank will move on price.
Buy a foreclosure for 400,000 from BMO, put 5% down at 20k, get a mortgage through your bank of choice for 380k.
Appliances are not "included" but rarely gone from the property. Reason being, the bank is not able to guarantee the previous owner owned them outright vs leasing them. Sears could show up on your door asking for them back.

[Lt.Spears]

In terms of ownership of the foreclosure, it all has to do with conditions upon offer correct? Ive heard one you are allowed conditions, the other, no conditions.

[Travis Munroe]

If it is a bank owned property, conditions are allowed.
Court of queens bench properties, conditions are allowed but once the court date is set, there is a chance that other realtors will be present with offers that are unconditional.
Just dealt with one the other day where someone wanted to go see a court of queens bench listing but the court date was the following day and there were at least 6 offers submitted. If you are a seller, you are going to sacrifice a bit of cash if it means a unconditional offer.
All that being said, you can have everything done in advance, have condo papers reviewed, get financing in order etc. The problem with the one I mentioned above was the court date had been set 2 weeks prior and didnt give any time to prepare these things.

[MrCallahan]

Real estate is something that I've just been learning recently...so I'm definitely no expert by any means. But I've been learning about it, and would like to get into the market sometime soon (either as an owner, or maybe investor). So this is just ramblings, based on what I've read/learned...so take that for what it's worth.

But there's always hype about buying foreclosure homes, because there's this idea that they are cheaper and you can get amazing deals. But from my understanding, this isn't really the case. The banks will take over properties that their owners have defaulted on the payments, to which the bank will turn around and sell at 'fair market' value. So you're essentially buying the house at regular price, but dealing with the bank, rather than owners/brokers and such.

But the trick to get the real good deals on houses, is to actually buy it in its pre-foreclosure state. In this case, the owner is obviously in a very tough point in their life, because they are having a hard time or can't make payments on the property. I would think they are generally wanting to sell the place ASAP, or are at least willing to listen to offers. Of course, you don't want to take advantage of them, but I'm guessing this is the time when you'd probably get your better deals on property. On the other hand, I imagine finding this type of property is a little tricky...scouring ads, or networking with people.

Does this sound about right when dealing with foreclosure items?

[bomba]

Originally Posted by MrCallahan

Real estate is something that I've just been learning recently...so I'm definitely no expert by any means. But I've been learning about it, and would like to get into the market sometime soon (either as an owner, or maybe investor). So this is just ramblings, based on what I've read/learned...so take that for what it's worth.

But there's always hype about buying foreclosure homes, because there's this idea that they are cheaper and you can get amazing deals. But from my understanding, this isn't really the case. The banks will take over properties that their owners have defaulted on the payments, to which the bank will turn around and sell at 'fair market' value. So you're essentially buying the house at regular price, but dealing with the bank, rather than owners/brokers and such.

But the trick to get the real good deals on houses, is to actually buy it in its pre-foreclosure state. In this case, the owner is obviously in a very tough point in their life, because they are having a hard time or can't make payments on the property. I would think they are generally wanting to sell the place ASAP, or are at least willing to listen to offers. Of course, you don't want to take advantage of them, but I'm guessing this is the time when you'd probably get your better deals on property. On the other hand, I imagine finding this type of property is a little tricky...scouring ads, or networking with people.

Does this sound about right when dealing with foreclosure items?

I'll let Realtor1 fill in the gaps, but you are wrong in your analysis. Yes, the bank sells the property at "fair market value", but that FMV is based on the fact that you are buying a property without warranty in an "as is" state. So that said, the price can be significantly cheaper then what a comparable unit that is sold with warranty or available condo documents, etc.

[Lt.Spears]

Question:

If a realtor is the seller of a property and also the realtor for the buyer, are his costs less? Are the clients costs less?

[Travis Munroe]

Good question,

commissions are outlined at the time of listing the property.
The clients costs:
Buyer doesnt pay anything out of pocket. Some might say that the seller will give you a better deal had you not had a realtor although if you are not experienced in buying real estate you may make mistakes that cost more in the long run.
Seller pays all commissions, ill PM you what I do in the situation where I represent both buyer and seller. In this case, the realtor becomes more of a facilitator of the deal as he cant give financial advice to either of you unless you sign off on customer status at which point he is working for the other client.

[bizaro86]

People always want to know if foreclosures are good deals or bad deals, and that's not the right question at all.

Look at a specific property, and figure out if it's a good deal or not. If it is great, if not, keep looking. Some foreclosures are overpriced, some are underpriced, and some are about right.

Instead of looking for foreclosures that are a good deal, why not just look for real estate that's a good deal?

[MrCallahan]

Originally Posted by bomba

I'll let Realtor1 fill in the gaps, but you are wrong in your analysis. Yes, the bank sells the property at "fair market value", but that FMV is based on the fact that you are buying a property without warranty in an "as is" state. So that said, the price can be significantly cheaper then what a comparable unit that is sold with warranty or available condo documents, etc.

I guess that part makes sense, never thought about the warranty portion of it. So as long as you know what you're getting when purchasing a property, there could still be some value in going with foreclosures. But it could increase the risk, since you could be unaware of all the conditions. Good to know!

[Travis Munroe]

Everything said above is true.... Each foreclosure is to be treated as its own case.
It is priced at FMV based on it not having condo docs, a RPR, guaranteed appliances, warranty etc.
If it has been on the market for quite some time, you may get a great deal.
Imagine who you would rather negotiate with....a seller who has lived in the home and has emotional attachment or a bank who sees it as just another number/headache.