Monday, May 19, 2008 at 05:06PM
REO Roundup
These REOs are providing some great entertainment - here are some of the highlights:
#1 - We saw the high-dollar Valley Center house lacking in curb appeal, but that is one of two I've been assigned in the area. The other REO is a manufactured home on 1.1 acres on a hill with a great view of Palomar Mountain. So good, apparently, the sellers have had a hard time leaving.
The first visit found the house vacant, but the garage was full of tools. Good enough, send the crew in to change the locks, which they did. When I came back to verify that the house was secure, I found the doors open, a dog inside the house, and a suitcase spread eagle on the kitchen island.
OK, so the guy came back for his tools - I called the sheriff for a drive-by and was on my way. The next visit was what you'd expect, the tools were all gone, and so was the dog and suitcase. Great, let's get busy on selling!
I stopped by yesterday on my way to the other REO, thinking I'd find the clean-up crew complete and ready to sell. Instead, I found a bed, a television, and a dining room set with six chairs moved back into the house! The house was secure, so the intruder had to break in or force a window open. Why are you moving back in - some ploy to extend occupancy? The neighbors had told me that the owners had moved to Arizona, and could it be the kid?
They left a check for $100 on the front door for the gardener, for May's service. I callled the sheriff and waited for him to arrive to file a formal B&E report. We talked about real estate, and then he helped me move the goodies out to the patio - where I left a nasty gram for the intruder, encouraging him to never come back.
About 30 minutes later I get a call from a realtor who wants to show and sell my new VC listing - turns out it's the sheriff's wife!
She was nice about it, and could very well be the agent who sells it, for all I know.
#2 - One house that is tenant-occupied had an interesting fraud case behind it. Kelly at the Voice of SD is covering it, so I won't steal her thunder, but it's the typical buy-the-house-and-rent-it-but-don't-make-the-payments package. The tenants get caught in the middle, and when they asked if C-wide would let them stay until mid-July so they could testify, C-wide said OK (the perp is in jail awaiting trial).
#3 - The cash-for-keys program is loosey-goosey, to say the least. The first owners that agreed to vacate in two weeks, in exchange for the $2,500, and left last week as agreed. Nothing yet from Countrywide - no calls, no emails, no responses to the daily messages I left for the party in charge - and no cash or check. Not a good sign, so far.
#4 - I have run into a couple of 'foreclosure consultants' - agent-type people who negotiate on behalf on the foreclosed borrowers. They don't exactly 'negotiate', they just tell them that some old fat guy is going to knock on their door some day and offer cash-for-keys - take them up on it. Not sure yet how much the 'consultation fee' is for such sage advice, but I've at least enrolled them into getting the required signatures for me.
#5 - We're up to six offers in on the Securidad property, and the Countrywide asset manager was right on it today. Any time you hear that it takes days or weeks to get a response, look at the listing agent as much as the banker. We counter-offered all buyers to submit their highest and best offer, and we agreed that FHA offers are discouraged. There are extra fees that the sellers must pay on behalf of the buyer, plus the appraiser has to identify repairs that the seller is then required to fix.
#6 - The former owners aren't all taking advantage - of the 20 I've been assigned, six of them were vacant on day one, and three others have left since. Another four have chose the cash-for-keys program, so only 7 of 20 are choosing eviction. No problem, you better enjoy the free rent while you can, because trying to rent with a recent eviction on your record won't be easy.
We agree that we'll go broke working REOs only, and the only reason to do it is to be there when it moves up the food chain. Stay tuned!
Jim the Realtor
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Reader Comments (7)
Great stuff, Jim. You know your stuff and yer gettin' it done.
You've got a book in you, my friend.
You can't make this stuff up. Thanks for the insider laughs.
Maybe someday you can describe some of the colorful characters but I understand not until after the fact.
Jim, you said...
"We agree that we'll go broke working REOs only"
Are you taking a reduced fee on the REO listings? It seems that sense REO's are the only ones selling in this market, you should be doing pretty well. If you can build a 200-300 listing book like the other agents you profile, it seems like life would be great.
West,
Countrywide is paying 6%, with a minimum 3.5% going to the buyer's agent. That's all good, and smart by Countrywide.
But I have four people deployed on these, and selling these $127,900 properties equates to $3,197,50. We have to be in it for the long haul, and be convinced that bigger fish are coming. We believe that the REO trail is heading to more exclusive areas.
Link to LA Times article about luxury market and foreclosures
Building up to 100+ listings seems pretty do-able, and having great help and organization in place already is a head start. But I like my practice the way it is, and I don't want to give it up. So I'll attempt to balance the REOs with the regular business model.
Jim,
During the 90's bust, I used to repair foreclosures for a company named R.E. Franko out of Saugus. Anyway, one day while working on a Sylmar foreclosure, the recent evictee showed up with his thug friends. They had been hanging out smoking dope in the garage across the street just looking for trouble. I explained that I was a construction guy and not the new owner. My heart was beating so fast, I thought it was going to explode. I escaped the wrath, but unfortunately, an agent showed up to check out the house. They hit him before he said a word. It was ugly. I'm pretty sure they broke his nose. I ended up driving him to the emergency room and I never heard what happened after that. I think he was too scared to file charges. Foreclosures are an ugly business. Please keep that story in mind. Dress down and be safe!
I second that be careful advice. I remember reading about a realtor that was shot and killed in El Cajon serving papers to a disgruntled condo owner just last fall. Aside from angry former owners there are always the transient types that see a vacant house as great place to crash and trash. Invest in a few "beware of dog" signs and place them prominently as you move to the backyard. Nothing gets someones attention better than the thought of tangling with an angry dog. Any buyers looking at the property should have an agent that will call you at which point you can explain the signs.