I received a call yesterday for a list of foreclosures. Nothing new, I get these everyday. I decided to ask the guy why he wanted a list of foreclosures. He says to me,I want a really good deal. I say to him, so you think the banks are giving away money? He says, well they price the foreclosures lower. I have sold many foreclosures and I think alot of people don't exactly know how it works. I shared this information with him and I thought I would share with you today.

When a person is going into foreclosure, if there is equity in the house then they will put it up for sale to try to save the extra lawyer fees and to save their credit. We all know how important that is. Eventually if noone has purchased it, it forecloses. The bank then (in every case I have done) hires TWO appraisers to find the market value. Then they put it on the market. Did they give away money? no.... some are priced lower, but in most cases the properties are priced low to make up for the condition. By the time you buy it and fix it back up, you would have paid less had you gone to a seller without late fees and attorney fees. Also let's remember that the bank employees are not financially attached to this property so they are LESS likely to negoiate. (they aren't as concerned with selling the house) A seller that has to move out yesterday is more likely to negoiate and will definately get back to you quickly. If you do decide to go the foreclosure route just be aware you will not get an answer right away.

There is also alot more involved. If a seller or a foreclosure has owned the house for more than 4 years, your chances of getting a deal increase. Anyone who purchased in the last two - three years does not have equity (unless of course they put money down). Keep this in mind when choosing your new home.

So I had a client the other day ask me why it was standard procedure to ask everyone if they are preapproved. It got me thinking that alot of people probably don't know this. Let me tell a true story that happened to me about 5 years ago. So I had this client that came to me wanting to buy a house, sure I will show you houses I tell him. I ask if he has been preapproved and he says yes. At that time he was approved up to $250,000 (was alot back then) through a friend he knew that was a loan officer. So I say wow that is great. I got the loan officer name and number from him to have when I needed to fill out the contract. (there is a section where you have to fill in the financing terms) So we go out and search for homes. It was great, so many beautiful homes to see. We had a blast and he finally decided on a very nice townhouse in Centreville. So I go back to the office to write up the offer and I call the loan officer. The loan officer goes on to tell me that they were preapproved up to $250,000 and she had been in the business for along time. That is great I tell her and then ask for the loan details. She goes on to tell me the details and then she says at the end, I will call them now and tell them their payment...... (my jaw drops) you haven't discussed their payment yet? I asked her..... can you believe this... this is the most important part of buying a house, can you afford the payments. What I have learned through my experience is that loan officers will approve you up to ridiculous amounts of money. Wether you can afford the payment or not. So to make a long story short suddenly we had to go back out and search in a lower price range.... My client was very upset and so was I. He did find a smaller townhouse in Centreville which I helped him buy and he still lives there today. So now I ask up front for the loan officers name and number and ask all the right questions my clients don't realize they need to ask or better yet send them to Tammy who is wise enough to understand the payment is what matters the most.

The truth as I see it
Well an amazing thing happened to me … I lost my first listing. Yes it hurt. I am sure you have seen time and time again where realtor signs are replaced my new realtor signs, happens everyday…. but never has mine been replaced until now. I guess it has been 7 years, it was bound to happen eventually. OK so this is how it went down. I got a buyer for my listing so quick (35 days!!) But this buyer happened to be a loan officer (should be great right! Not this time) well apparently this buyer/loan officer’s check bounces….. Then the seller is mad at me….. Yes I know I didn’t write the check or take out all of the money from her account and cause it to bounce but the seller was mad at me. Then the buyer wants out of the contract… I think she couldn’t get the loan, not positive though. The seller is mad at me again and obviously my sign comes down…. L Now I realize that some sellers are as uneducated about my career as I am about theirs. Kinds obvious you say……I know. I should have taken more time to explain to this seller (or maybe she should have listened) that right now due to all of the foreclosures, the real estate lending industry has tightened up it’s lending criteria causing buyers everywhere to not be qualified anymore. This is happening everywhere…..
I couldn’t help to add this but this is yet another reason why I think now is the best time to get a home because most sellers are coming out of denial and lowering their prices and the rates are still low. Unless we have a major depression …(I can’t see that happening) prices are not going down that much! However the rates are on the rise…. causing you monthly payment to go up. Call me 571.292.5377 for the worksheet I have showing the payment differences….
OK Back to the story, Now usually I would contact the loan officer and find out the details on the buyer, but when the buyer is the loan officer, things work quite differently… Let’s all remember Realtors don’t run credit or collect financial information, that is what loan officers do. With all of this being said, if the true intent is to sell, then a seller will jump right back on board (so what if they have packed their house, they are moving anyways….) no whining, no complaining, put their house on the market and carry forward. If you are in this situation be positive and look ahead. As far as me…. Yeah losing my first listing hurts but I can chalk this up as another learning experience. I have learned the more educated the sellers and buyers the less likely this situation will arrise in my future. So I will continue educating myself so I can educate you and help you make better decisions. And that my friends is the truth as I see it.

Which has less traffic 66 or 95?