Build and Destroy – It’s About Time

It is about time!  Kudos Guaranty Bank.  The simplest way to limit the supply is to eliminate it.  Not only does it limit the supply, it detours future dilapidation and possible degradation.

Thanks to Vision Victory Manifesto for the footage

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5 tips on buying a foreclosed home

1. Finding one has become easier
You don’t need to show up at courthouse auctions or comb through legal filings. These days many banks sell foreclosed homes through real estate agents.
2. It’s best to buy from a bank
If you buy a foreclosed home at an auction before the bank repossesses it, you’ll have to pay in cash, and you usually cannot inspect the property. You may also later discover that there are liens against it.
When a bank takes back a home, however, it will clear any outstanding liens. Plus, when you buy a bank-owned property, you can inspect it beforehand, and you can finance the purchase with a mortgage. Leave your suitcase full of cash at home.
3. Bring in a contractor before you buy
Many foreclosed homes have been abandoned, some even vandalized, and they often require major repairs. “One mistake a lot of people make is underestimating how much work it needs and the cost,” says Rick Sharga of RealtyTrac.
To avoid getting stuck with a surprise bill, ask a contractor to give you an estimate of how much the restoration will cost and how long it will take. Many will do so for free in hopes of winning your business.
4. Bid low
Banks aren’t necessarily selling foreclosures at fire-sale prices; some are listed at market value, says Gene Hacker, a broker in Orange County, Calif. So be prepared to haggle. The bigger the inventory of foreclosed homes the bank has and the longer the property has sat, the greater your chances of nabbing a great deal, says Chris Matty of ForeclosurePoint.com.
Set your initial offer about 20% below market price – or more if your area has a lot of foreclosures.
5. Be prepared to wait
While some lenders are getting back to bidders within 36 hours, others are dealing with an enormous backlog that can hold up their response for as long as three months. While you wait, someone can trump you with a higher offer.
To boost your chances at scoring a home you love, have multiple properties in mind, and get your financing pre-approved before you bid. Even if the lender says it has another offer, follow up every week – these deals can often fall through.

Pending Sales Rise for the Second Straight Month

I was once told by a wise man that luck doesn’t happen twice in a row. So here we go again another month of positive signs coming from the housing market. The Dow surged 214 points today, a little better than a 2.5% gain, on the better-than-expected numbers coming out of the housing market. So are you ready to get off the fence and get in the game yet? If your not there are plenty that are. Don’t let the bus pass you by again!

“If you subscribe to the theory that the global economic crisis started with the U.S. housing market and will end there, you’re going to be encouraged by reports like this that suggest housing is bottoming,” said Kevin D. Mahn, managing director at Hennion & Walsh.

The March pending home sales index from the National Association of Realtors jumped 3.2% from February, surprising economists who were looking for the index to hold steady.

Pending home sales rose in March for the second consecutive month and are up year over year. The Pending Home Sales Index from the National Association of Realtors showed a 3.2% gain to 84.6 from February, when it was 82. The index stands 1.6% higher than a year ago.

It may still take a while before the market gains enough momentum to firmly state that the downturn has been reversed, according to Lawrence Yun, NAR’s chief economist. And, the upturn may have been boosted by the first-time homebuyers tax credit, a temporary measure that will lapse in December.

“We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around,” said Yun. “This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a down payment.”

The index is understood to be a forward indicator of home sales trends since it measures contracts signed, not completed sales. The up-tick may indicate that home prices have fallen low enough for buyers to get off the fence.

Anecdotal evidence indicates that trend may be happening. Realtors and other industry insiders are seeing rising open house attendance and multiple bids on some particularly desirable properties. Plus, pricing has become sharper, according to Sherry Chris, the CEO of Better Homes and Gardens Real Estate.

“Overpricing seems to be ending,” she said. “Properties are coming onto the market and selling quickly.”

And buyers are feeling a little more urgency, she added. In many markets, buyers have not felt any pressure to make an offer. “They said to themselves, ‘I don’t have to act immediately. It will still be on the market two weeks from now,'” she said.

Today, buyers are more likely to bid because they perceive the market as at or near its bottom. An April Gallup Poll reported that 71% of Americans thought it was a good time to buy a house.  This is reflected in the multiple offers that listing agents are starting to see from potential buyers. Out of the 10 plus contacts that I’ve written in the past two weeks more than 80% of them have had multiple offers. I’m talking about homes that have been sitting on the market for 6 months to the past year with no activity. It’s not just the homes in great condition that are going fast it’s the diamonds in the rough that have the greatest profit potential when the market rebounds that are flying off the shelf. The bank owned and short sales that are priced to sell.

King County Bank Owned Foreclosure Charting

Location of Seattle in King County and Washington
Image via Wikipedia

The Seattle Times has two great research tools to help individuals research Number of bank-owned homes year over year, and Finding Foreclosure information on your neighborhood.

These research tools do not provide listing information on Seattle, Washington Bank Owned REO Foreclosures.  If you are looking to purchase a Bank Owned home, feel free to request a FREE Bank Owned Foreclosure List, we would be happy to provide you with one.

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Washington Mortgage Rate Watch May 2009 – May 2009 Mortgage Forecast (Chart)

It’s already May, and time for another Mortgage Rate Watch May 2009 – May 2009 Mortgage Forecast

Loans closed in May will have first payment dates of July 2009.

If April was a harbinger of things to come for May, Washington Homeowners and Homebuyers will be the proud recipients of stable LOW Historic Mortgage Rates (see chart).  The FED will continue its Agency Mortgage-Backed Securities Purchase Program, which is will temporarily keep rates low.  Once the Purchase Program wraps, “Hello Carter era Rates”!

From the current analysis of MBS charts coupled with GOV subsides look to see rates stay low until late fall. If you are planning on purchasing or refinancing, now is the time to “Get off the fence” as both can take anywhere between 20 – 60 days to close.

April 2009 Mortgage Rate Chart

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As Inventories Go Down Sales Surge

Compared to February, last month’s pending sales (offers made and accepted, but not yet closed) surged 25 percent. Last month’s volume was down 5.6 percent when compared to twelve months ago, but it was the highest monthly total since September.

Inventory fell sharply from a year ago (down more than 14 percent), in part due to fewer new listings being added to the supply. Member brokers added 10,252 new listings during March, compared with 13,274 for the same month a year ago, for a drop of nearly 23 percent.

 Prices for last month’s completed sales fell about 14 percent area-wide from a year ago, reflecting a combination of factors, including a lingering imbalance between supply (inventory) and demand (buyers), creating a favorable market for buyers. Also, although not quantified in the NWMLS report, a sizable number of foreclosed homes and short sales are included in the monthly tallies so those deeply-discounted properties tend to drag down prices overall.

Pending sales in the MLS map areas that make up most of Seattle surged 35.4 percent in March compared to February. The southwest part of King County also registered robust month-to-month gains – 39.3 percent — while sales on the Eastside rose more than 32 percent last month compared to February.

Condominium prices are down about 8 percent from a year ago and 2.5 percent from a month ago. About half the counties that reported closed sales of condominiums during March showed price increases when compared to February.

According to Ian Shepherdson, economist at High Frequency Economics, “Single family homes, which are considered the core of the market, fell at a 10% annualized rate in the first quarter of 2009, after a 17.4% drop in the last three months of 2008. At the current sales pace, existing-home sales will be down “only 2%” in the second quarter.” 

First-time buyers made up 53% of existing home sales in March. Chales McMillan, National Association of Realtor’s president, said first-time home buyers are crucial to the overall housing market. “The housing market always heals from the bottom up, and with large numbers of first-time buyers entering the market it will become a little easier for sellers to trade up or down.” Meanwhile, sales of “distressed properties” accounted for over half of all transactions in March. Foreclosed homes typically sell for 20% less than traditional homes.