The window of opportunity to buy California real estate at bargain prices is opening now. Nobody knows how long it will remain open.
Motivated sellers, combined with a tight credit and lending environment creates opportunities now for anyone who has the buying power to close transactions now.
Know and Use Your Buying Power
Buying power consist of available cash for a down payment, as well as your credit. And credit means more than just a FICO score, it’s also important that you stay within certain qualification limits with regards to debt-to-income ratios etc.
Many people who think they are qualified are in fact not. Lenders have tightened their standards and available programs considerably since August 2007, and are cutting programs virtually every week.
You have to work with a reliable source for funding and credit to be ready for any opportunity that presents itself.
In this REO and foreclosure market environment, it is very important to stay focussed. Otherwise you become a “window shopper” who misses out on the true bargains and the huge opportunity to create wealth right now.
Don’t be a “Window Shopper”
We have just pre-released a special report, “The Rise Of the Trusted Advisor In Real Estate”. It is available in PDF and audio formats, and you can download it FREE for a limited time. Go to http://GotForeclosure.com/trust/update/ to get instant online access to the latest version of this report.
Join the visionary group of buyers (move-in buyers as well as investors) who can see the opportunity in this market right now! Our capacity to work with you directly and find custom tailored properties that fit your needs and goals is limited.
Download your free report now at http://GotForeclosure.com/trust/update/ and meet your goal to buy a home or investment property within the next 60 to 90 days!
That’s by and large the best way to find a bargain deal in real estate. Any “guru” will tell you that, and even most real estate agents will acknowledge that “motivated sellers” are more likely to accept an offer below the asking price.
In fact, isn’t that what they’re indicating when they put “seller motivated” in the property description of their listings? Well, in an REO and buyer’s market, the “seller motivated” tag can signal to the potential buyer that it’s better to wait and see how motivated the seller really is. - Let’s come back in a month or so and see if the price has been dropped.
Now, what if the seller is a bank or lender?
In that case you can come back in 90 days and see if the price has been dropped 3 times yet.
What’s up with that? Isn’t anyone at the asset management departments smart enough to see that “cutting your losses early” would help prevent an even bigger loss?
As far as I can tell after talking to many REO brokers and asset managers myself, lenders are confined to using the “rear view mirror” when making selling decisions on their non-performing assets. “We’re using only sold comparables to determine value,” is a statement you hear frequently when negotiating a low offer. Guess what, in a declining market, sold comps are higher than what you can sell your property for.
Is there a better way?
Of course! Contact the bank BEFORE the property goes to the MLS listing. The time frame between the trustee sale and when the property hits the MLS is a great time to cut deals.
How to find these properties
It couldn’t be simpler: Just run a search in the search from below, and select a bank owned property you’re interested in (the ones with the red circles).
OK, I’ve decided to give you an idea about how I go about identifying the BEST foreclosure properties to go after.
Why don’t we take the search that I posted in this blog post a few days ago and take it a step further.
The image below shows what happens if we narrow down the search in the same higher-end Arcadia zip code to the following criteria:
Pre-Foreclosure only
Equity position of at least 30%
As a result of this search only 11 properties of the 44 Pre-Foreclosures are left:
This is a great list to focus your attention on. For example, a property on 4th Ave with a zillow.com estimated value of over $900,000 has a combined loan balance of less than $400,000.
Certainly there is a deal to be made here… There is no need to wait until these properties get stuck in an overpriced listing! Email me for help!
The map below shows properties that are currently in foreclosure in the 91006 zip code in Arcadia, CA.
A total 72 properties are shown.
44 of them are in “pre-foreclosure” (green pins)
11 are “auction opportunities” that will be sold at trustee sale shortly
The 17 remaining properties are bank-owned (REO). The REO properties may be listed on the MLS or still in the process of evicting the previous owner or tenant.
What does this picture tell us?
There is a higher concentration of foreclosure homes in the lower Arcadia area, which is slightly to quite a bit lower priced than the are North of the 210 freeway.
There are no bank owned properties North of the freeway. That supports the theory that higher priced homes are still more saught after and therefore retain more equity, which gives the owners more options to avoid a trustee sale.
BTW: You can do your own free search right here: (Just type in 91006 in the location and click “Search”, and you’ll get an interactive version of the map above.)
Now, what can you do with this information? Unless you are just here to amuse yourself with foreclosure and real estate market theory, there are different opportunities and ways to pursue them.
Pre-Foreclosure: Approach the home owner and purchase the property directly from him/her if he/she is willing to sell.
Auction: Bid for and purchase the property at a trustee sale auction at the courthouse steps.
Bank Owned: Wait until the proeprty is listed on the MLS and make an offer.
Sounds like work? Well, it is - AND it helps when you know what you’re doing. If you take the time to get educated about the possibilities it can be worth while, and you could save a bundle on buying your next home or investment property.
Contact me if you need help. We are not real estate agents. We are a group of active foreclosure and real estate investors who specilaize in locating and negotiating great deals on real estate.
See several case studies of foreclosure properties in Arcadia on the Arcadia Housing Blog.
