Blog About Circleville & Pickaway County

I wanted to post my thoughts on a quite popular real estate website (RealtyTrac.com) and the frustration that I have had with this company.

Many, MANY people go to this website to obtain real estate information, mainly with foreclosures due to them showing up in the first few pages of Google’s search for foreclosures.

Individuals are then directed to a nice map of the US where they can select areas/counties of interest. Once they do that , a VERY large list of properties will come up, enough to make anyone thrilled with the potential of HUNDREDS of foreclosed properties in their area.

While this may seem like a great thing to jump in to, I’ve received tons of calls from individuals who ask me about a property or properties I deal with that are found on RealtyTrac.

The BIGGEST thing I run in to is the inaccuracy of information on the website, in my area, they throw every single property that has almost any legal issue associated with it on to the website. Reviewing the properties that are on the website states that there are 181 properties in my county that are available as foreclosures. This is well over TEN TIMES the number that is available. It may be true that there are 181 delinquent homeowners and the such, but they’re not available at all. In fact, if the homeowner resolves the issue with the bank, which could be a changed address or like to have the bank issue a notice of default, the property will remain on the website.

So  , that information they ask you to pay for? It’s not only old , it’s also incorrect the vast majority of time. The “Values” Stated as well are usually grossly incorrect, in my area ,they are posting the amount the lending institution purchased the property at. One property I had listed was asking $124,900 , and the website posted that it was available for $80,000. I received phone calls from several individuals who were crushed to find out that they couldn’t buy the home for $80,000. The property went on to sell for $118,500 after repeated notices to these RealtyTrac buyers that the home was well in the range of the $124,900 asking price. THEY PAID TO RECEIVE INCORRECT INFORMATION!

Not only that, many real estate agents are convinced to pay a monthly fee or such to receive the names and phone numbers of the people who view homes on the website. Not everyone knows that many of these “Free” websites like homegain.com and housevalues.com sell your name & Phone number to the highest bidder.

It’s very upsetting to see the impact of technology on a industry that does not always have professional rooting in technology.

I wanted to update this forum and update all the readers as to all the wonderful things I’ve read about bulk REO Sales.

I was somewhat incorrect in stating that no bulk REO sales take place, as from my research since the last post, I’ve found about 10-15 deals that have closed. All have been smaller packages in the 1m to 25m range, with one being a package with a purchase of dozens of REO properties in metro Detroit for $62k (With a market value in the 2 million range, talk about a deal!).

Anyways, In addition to finding out all this WONDERFUL information I’ve also been contacted by plenty of people that didn’t know what they were doing, and have absolutely no hopes of ever accomplishing bulk REO deals.

So, Having said that, I do have TWO Bulk REO seller brokers that do have legitimate deals, and can close them/have closed them.

Heck, I’m involved in a package deal right now, and everything is good.

So…..If you would like to be set up with one of the fabulous bulk REO Sources , I’ll need this information from you :

• Are you principals or agents in this space?
• What is your capital structure? Hedge fund, LLC, Subsidiary?
• Will you be using a warehouse line or straight equity in your expected REO transactions?

• What equity capital is “in position” today? What warehouse/financing is “lined up”
today?

• Have you done a transaction before? If YES, what law firm did you use?

• How many people in your company?

• What was your company doing last year?

• When and how did you raise your equity funds? Reg D offering 504, 506?

• How long have you been in this type of business?

• What title firm branch did you use? Name?

• Who is your accounting firm?

• What state are you incorporated in

• Who is the person in your organization with the most experience in this space?
What’s their experience?

• What is your stated investment strategy?

• Does the management of the firm also control the investment decisions?

• Elaborate on your exit strategies?

• Is there anything that we should know about your firm?

If you can answer those questions, I can then put you in touch with a legitimate seller.

Don’t want me in the daisy chain? I do have flat fee for their contact information.

Well, we’re nearing the close of yet another month in the 2008 sales year.

I continue to be amazed at what’s going on in our market.

Sales continue to be average to slightly less than average as compared to 2007 (Which was slightly less than 2006).

While sales are slightly slower, the inventory CONTINUES to drop , this is one of the first times this has EVER happened in the market.

I have pulled a historic graph over the past 1 year+ along with inventory

As you can tell, the first 3 months in 2008 have seen a reduction overall in inventory, and total inventory supply VS past months comparatively.

I have further searched the MLS and found the current statistics for April, and this trend very much continues.

Based on CURRENT MLS Statistics, this month, there have been :

If you Add the New properties and re-introduced properties, you end up with 79 listings.

If you figure the total number of properties that are no longer on the market (Withdrawn+UC+Expired/Contingent) You end up with a total of 76 properties that are no longer on the market.

This is a total net gain of 3 homes (Or less than 1%) to the current inventory. Last year there was a total gain of 9 properties.

It’s quite interesting to see what the market is doing in the middle of a energy/housing crunch.

If you determine a daily average and comparison , we SHOULD end the month with total sales of 50 homes, which would be a increase of 28% over last year (We’re already at a gain of 7.5% over 2007).

The areas included in this report are : Circleville,williamsport,orient,new holland, darbyville, tarlton, ashville, and all other municipalities in Pickaway county.

I wanted to post this up, here recently I’ve been running into a great problem with finding buyers homes.

Usually there’s always 10-15 properties that fit the bill for my buyer, I’ve been curious because of the lower number of properties I’ve been able to find. We’ve also had a great reduction in total available foreclosures for buyers.

There are a total of 341 Single family properties (Condos incldued) for sale, with a total of 55 properties under contract, this leads us to a 16.1% current pending rate. This is great news for sellers as in a situation like this, the average appreciation usually goes up due to fewer homes available to buyers. Many times this will end in properties with multiple offers, which usually increases final sales prices.

Wanted to post updated statistics of what’s going on in Pickaway county regarding foreclosures.

Overall we’re down GREATLY from the same period in 2007 when there were about 35 or so active foreclosures on the market.

As of today, the system I’ve built to track active foreclosure in Pickaway county says we have about 13 current active foreclosures. This of course does not include HUD listings, which have been removed due to a conflict with the last management company, they are in transition and should hit the market by the end of the month. This will increase the total number of what’s available, although it shouldn’t be more than 10 county-wide.

Total number of homes available at sheriff’s sale this time is up greatly from last year (About a 30% increase) although my feeling is not all of these will make it to the auction.

• Chase 4
• Wells Fargo 9
• Saxon Mortgage Company 1
• GMAC Mortgage 3
• Huntington Bank 1
• Bank of New York 5
• Countrywide 4
• LaSalle Bank 1
• PHH Mortgage 1
• 5/3rd 2
• Glouster Community Bank 1
• JP Morgan Chase 1 (Commercial)
• National City Mortgage 5
• US Bank 7
• New Century Mortgage (Now Carrington) 1
• Deutsche Bank National Trust 5
• The Savings Bank 1
• Southern Point Subdivision 1 (Corporation)
• HSBC 2
• CITI Mortgage 1
• American Home Mortgage Services 1

Total till mid May : 56

This number is up greatly from the same period last year, and so far from my personal research there have been just about 68 total foreclosure filings in the county this year.

IF these mortgages aren’t mitigated, we might see a good deal of foreclosures on the market. What’s interesting is the shift from Countrywide and Deutche Bank to Wells Fargo and the Bank of New York. I don’t know of a reason for the shift, but it’s interesting to note due to the fact that the majority of foreclosures last year were with a few banks, this time around there with quite a diverse group.

I wanted to post up a message to try to address the questions that I’ve been frequently emailed from real estate agents, asking me just how to list REO properties.

I want to start out and say, I don’t specialize in REO listings, although as time goes on, I feel that I will gravitate more towards this field. Right now , I specialize in representing REO buyers….Which is something that very few agents want to do, and so far I haven’t met a SINGLE agent who claimed this as their specialty.

 This is by no means, the only way to do this, but I feel it’s most effective, because any agent that wishes to deal with REOs needs to understand the full scope of things, and not assume this is a easy field of work by any means.

1.  Establish a line of credit at a local bank for NO LESS than $30,000 as operating capital for your new REO Business
2. Get a list of properties headed for foreclosure in your area
3. Contact the foreclosing lender
4. Through phone or physical contact, find the REO department or other asset overseer
5. Contact that department or the outsourced asset management
6. Send a application to the vendor
7. Wait for them to send listings

See , now wasn’t that easy?

I’m not going to provide great details on this, but it should put anyone on the right track, if you follow the steps, you could be listing REO properties in as soon as 2-3 years. It takes time to get a relationship set up with a bank and meet their requirements. Most ask for 2-3 years in the REO business and a # of REO handled assets as listings.

The statistics were published today concerning total sales per county in central Ohio.

These are from the county auditors (Not the board of realtors).

Pickaway County (Febuary)

• Sales  2008 - 35    (10.2%  Drop)
• Sales 2007  - 39

 Fairfield County

• Sales 2008 - 97 (14.9% Drop)
• Sales 2007 - 114

Delaware County

• Sales 2008 - 148 (19% Drop)
• Sales 2007 - 183

Personally, I don’t think the sales drops are too bad from 07, 07 had a spectacular 1st quarter.

I wanted to post this up, as I’ve been dealing with several people and been contacted by other agents regarding short sales and foreclosures

Many homeowners  are facing the prospect of foreclosure due to many circumstances.

 A Foreclosure the action a bank pursues (Normally) when a buyer can no longer make payments for the property they have a mortgage on.

 Homeowners may stop making payments for a myriad of reasons, lost jobs, health issues, increase in interest rate or maybe just because they don’t want to any more.

Foreclosure times may vary by state, it can be as little as 30 days , or as much as  year or more (It’s quite high in my area).

 If you are facing foreclosure there’s a order that you should go in to find your options. I suggest this for EVERYONE I work with to determine the best course of action.

#1 Determine why you can no longer afford the home. Is it because of a lost job or a change in personal circumstance? Or do you need to move somewhere else and don’t want to make payments on it. If you can’t make payments on it due to insufficient funds, you need to either try and increase your income to meet the demands of the mortgage payment, or find a way to remove the mortgage or reduce it.

2# Valuate the home facing foreclosure. I run in to FAR too many homes that end up in foreclosure that could of been easily prevented. In some cases , the homeowner could of MADE money by selling it and moving. In one instance the homeowner could of made $35,000 if they would of known the proper value of their property. The best way to do things is to have a real estate agent (Or a few) give you a good market value of your property. Doing this is free and usually doesn’t obligate you to using that real estate agent, should they be needed.

If you’re barely making payments (or not at all) on the home, CALL YOUR LENDER and see if they can reduce the interest rate, hold it back or anything of the sort. Banks don’t WANT to foreclose , contrary to popular belief, it’s extremely expensive for them to do so, and they almost always loose money on foreclosure. In some instances, you can refinance the property with a lower interest rate, or re-amortize the loan to reduce the payments. Both are potential options should you find you just don’t have enough cash.

 If you can no longer make payments, and can not sell the home and break even or make money. Contact a real estate agent that can perform a short sale for you. If you don’t know of one that’s in the business of doing a short sale, you can contact me and I will set you up with an agent that knows how to do one. Unlike a normal sale, your lender will pay the real estate commission for  the sale of the property. In many cases , the bank will sign off on any due amount to them, and the property can be sold for less than the amount owed. Some banks will even give the homeowner moving expenses to cover things. This is great for when a property has negative equity due to market corrections.

As always, consult a professional in the appropriate field if you’re facing foreclosure. Most of these things can be done for free, and in some instances , they can make you a little bit of money in the process, or cover moving expenses.

Today I received an email from yet another individual who has found my blog, looking for “Direct REO Bulk Sellers”. Meaning individuals at a bank or mortgage company who are willing to sell their properties in bulk packages of dozens, hundreds or even thousands of properties all at once.

 I’ve spent quite a few hours of research into this topic, as it was quite interesting due to the sheer number of inquiries I have people who “Have a buyer and is looking for $100,000,000 Worth of REOs”. It could certainly be a great way to make money , even at 1/2% of the total sum, that’s $500,000 for hopefully not alot of work.

Now , I don’t know about your neck of the woods, but $500,000 in my pocket equates to about around the next 10-15 years of my life. Why wouldn’t I want a part of something THIS spectacular and BIG?

So, I started digging in a GREAT network that of (BiggerPockets) that has alot of actual real estate investors that share experiences in every avenue of real estate. From foreclosures to raw land deals, to even Bulk REO Portfolios, there’s a dedicated section to it.

I was inundated with the sheer number of people who had “Actual Buyers” and “Actual Sellers” of bulk REO portfolios up to 5 BILLION Dollars (Yes, that’s a 5 with 9 zeroes behind it) in REO properties that are sitting somewhere in the US and the seller just absolutely has to sell them at 40% of the market value…who knows why they want to sell at a loss of 60% from the market value, but they just want to do it.

 So, after finding all these individuals who had information , I tried to find out who actually sells these bulk REO Packages, as it seemed they were everywhere.

I tried around a dozen or so sources to find a package for a individual who had contacted me through one of my websites/blogs about buying a REO Package. After a week or so , I was quite tired of using every possible keyword on Google to try and find these sellers.

I eventually found ONE GUY who I felt was legitimate, and attempted to set the buyer up with him.

I realized that this whole Bulk REO deal thing was starting to seem shady, so I started doing research in to actually how many dollars and cents have been transferred in non NPN (Non Performing Note) sales, but bulk REO Portfolios. As NPNs are transfer all the time and it’s not that major of a thing to get NPN deals or the like.

Well ,after I did all my research , I was amazed to find that fewer than 5 TOTAL DEALS have been closed in the USA with Bulk REO Sales. As of my last checking, the total was around 250 million or so between all these deals. Finding this odd, I contacted EVERY SINGLE PERSON that I had come in to contact through this process and asked them the simple question of “How many have you closed as of today, and how many do you have pending” and the answer was an astonishing ZERO. Several told me they were under contract, but even then the deal was shaky at best.

I did research these deals that had closed, and found out one thing…They weren’t from people using on-line services, they were people who knew other people at large banking/mortgage firms, and had the ability to fly across the US to set up these deals. They put alot of work, and none of them had any involvement with on-line services, finders, buyer mandates or the like, but good ol ground pounding financial work.

Sad but true in my case…….

Wanted to post this little tidbit up , from my understanding there are alot of people who currently don’t know the situation with New Century Mortgage.

 Anyways, some time last year, New Century Mortgage, a Division of Deutsche bank went bankrupt and was purchased by Carrington mortgage. Unfortunately there are many people out there who don’t realize that you NOW deal with Carrington Mortgage concerning short sales and the like.

Carrington Mortgage’s number is 1-800-561-4567

 I hope this helps clarify things.