Comments on: Killer Views and Dog Poop – Short Sale

By: Kary L. Krismer

Kary L. Krismer — Thu, 21 Aug 2008 14:41:20 +0000

BTW, I would add that not all foreclosure situations are short sales, and thus for some foreclosure situations the distressed property law is the only reason an investor would avoid it.

By: Kary L. Krismer

Kary L. Krismer — Thu, 21 Aug 2008 14:38:05 +0000

Jillayne, what Ken said after you (which I agree with and have said similar things myself) is why I don’t make predictions as to price. But while I won’t make predictions, I will say things like higher interest rates will make prices lower than what they would have otherwise been (but not necessarily lower than what they are now).

So, as to foreclosures, I won’t predict they’ll be higher (although that seems like a safe bet). I will say that the distressed property law will cause some people to be foreclosed that otherwise wouldn’t. Just has higher interest rates will result in prices that are lower than what they would otherwise have been, the distressed property law will result in foreclosures that wouldn’t otherwise be foreclosures. But many other things can affect the number of foreclosures.

I’m looking at this at a more personal level, however. If I were late on mortgage payments and facing foreclosure, I’d be very upset what the legislature did. I’d also be very upset that the Governor hasn’t called for a special session to repeal the problem as called for by the Attorney General (he called for the repeal, not the special session). In DC the politicians can get together and act quickly to help the housing market and the stock market. Foreclosures are a cancer on the market, and we should be getting the same quick action locally, but we’re not. And some people are going to lose their homes as a result. To the extent that’s a direct result of government action, the government should act promptly to fix it. January is not prompt.

By: Ken Crotts

Ken Crotts — Thu, 21 Aug 2008 14:23:43 +0000

Home buyers and investors ARE avoiding making offers on short sale properties. While the Distressed Property Law has created new reasons to avoid them the primary reason is lenders ineptitude in their dealing with these properties. Buyers and their agents face a long arduous process in which the lenders make arbitrary decissions, contrary to common sense, create conflicts and standoffs as a part of their negotiating techniques, and reverse positions without warning. The process is distressing at the very least for any buyer or their agent. The worst part is that a buyer will likely not know whether they will get the property at the agreed price until months after the offer and acceptance of buyer the buyer and seller.

This aspect of the short sale process reduces the number of both agents and buyers willing to work with them and thus reduces demand. The banks, in fact, are causing themselves greater losses as a result of their bad behavior to the extent their actions are causing home buyers to avoid properties in short sale.

By: Jillayne Schlicke

Jillayne Schlicke — Thu, 21 Aug 2008 05:24:09 +0000

Wait; I must have been mistaken. Kary doesn’t predict anything.

By: Jillayne Schlicke

Jillayne Schlicke — Thu, 21 Aug 2008 05:23:28 +0000

Sometimes I wonder if Kary’s predictions will come to pass: That the Distressed Property Law will result in more homebuyers and investors making a conscious decision to avoid making an offer on a short sale.

By: ARDELL

ARDELL — Thu, 21 Aug 2008 02:57:27 +0000

Thanks Ken. Yes, I’ve seen both. There have been a lot of painful lessons learned over the last few years. More will surface, as Jillayne points out. The fallout of all of this has really just begun.

By: Ken Crotts

Ken Crotts — Thu, 21 Aug 2008 02:16:06 +0000

Actually, Ardell, you will find that these are mostly middle class people who are trying to better their lives through real estate investment. Unfortunatly few people understand all of the risks, skills and nuances of real estate investing. What starts out as an ambition or dream turns into something else when mistakes in the purchase, financing , budgeting or planning surface. By that time it is too late. Once your name is on the title the property is yours, for better or worse. After running out of time and moeny these partially finished property are the result.

I do hear what you are saying about the unscrupulous scam artists getting a schill to finance the property and then bailing out with the money. I have a customer that was swindled on 3 properties with that sceme. However the majority are honest, ambitious, hard working individuals that have learned the hard way that there’s allot more to real estate investing than most people realize.

By: ARDELL

ARDELL — Thu, 21 Aug 2008 00:10:58 +0000

I don’t think they are teens breaking in. From what I’ve seen these are bought by people who say they are going to do the work, and talk someone else into getting the financing. Then the “sweat equity” guys hang out for free rent, do some work, but aren’t as capable as they thought. They spend a lot of money on supplies, but never quite get the job done and leave it in a big mess. The person on title who fronted the mortgage is left holding the bag.

By: Reba Haas

Reba Haas — Wed, 20 Aug 2008 22:36:35 +0000

I’m guessing the beer may be from also from teens getting into the property and finding it a good squatter house for their after hours parties?

I agree with you though, Ardell, that this is a common way or state of grossness in which we find foreclosure properties as we go out to look at them with, or preview for, clients.

By: ARDELL

ARDELL — Tue, 19 Aug 2008 20:49:08 +0000

Our eyeball estimate to do it right comes in at $200,000. They should have moved a couple of walls and expanded one of the balconies to capture the better view.