Are We Nearing The End Of This Foreclosure Mess In Atlanta?

Posted by Doug Quance on May 12th, 2008

Some Experts Believe That The Worst Is Behind Us

Although foreclosures hit a new high in the Atlanta area this month, the number of foreclosures nationwide dropped in April to 74,570 homes - down more than 5% from March.

While this might be good news, the current outlook is still rather bleak. Foreclosures in the Atlanta area are still double what they were a year ago, and this juggernaut is taking its toll on the residential resale market.

While this market makes it difficult to be successful in selling your resale home - it does make it easy to find good values as a buyer… and the conditions for buyers should remain extremely favorable for the next few months.

While I have been bullish for buyers for quite some time, I am starting to get bullish for investors, as well. Most of the previous owners of foreclosed properties will eventually be in the rental market… and since it is unlikely that lenders will finance these folks with the same type of loans that were used in the past, it might be a while before these previous owners will become homeowners anytime soon.

Since the rental market is improving, the attraction of acquiring rental properties at a good price-to-rent ratio is undeniable… especially when many investors are able to attain good positive cash flow with only 10% down.

And let’s not forget that the Congress will be passing legislation designed to help cushion the blow that the tide of foreclosures has delivered. While I am not in favor of many of the provisions of the proposed legislation that have been thrown around - I do understand that there can be legislation that would be beneficial to the crisis - and one can only hope that the right legislation will prevail.

As the tide turns, the incredible selection of properties - and their great values - will begin to fade. It’s simply the nature of the beast.

So whether you are considering purchasing your first home - or investing in rental properties in Atlanta - jump in… the water is getting nice and warm.

 

Atlanta Area News, Foreclosures, Tips For Buyers, Trends | 6 Comments »

Here We Go Again With The So-Called Guaranteed Home Sale Program In Atlanta

Posted by Doug Quance on May 6th, 2008

P T Barnum Said It Best - There’s A Sucker Born Every Minute

I received a call yesterday from a frustrated seller. She had tried to sell her home, herself… starting last spring. Then she tried a hybrid listing agent who gave her one of those "flat fee" listings in one of our two listing services. Then she tried an agent who has several listings in her neighborhood.

Nothing has worked, so far. Showings have tapered off to nearly non-existence. Now she wants to list with an agent who will guarantee the sale - or buy her home, themselves. 

Of course, I explained that these programs are just scams… but I was unable to convince her otherwise. I guess some people just can’t face the facts.

I originally wrote about this a year and a half ago, where I pointed out the fallacy of these programs… and how sellers are duped into believing their agent will buy their home. I also touched on it again a few months ago. 

If you are needing to sell, don’t be a sucker. Be rational - get educated about your market - and work together with your agent towards your ultimate goal of getting your home sold.

It’s tough work, these days… but you can be successful.

Ask The Broker, Mythbusters, Tips For Sellers, Trends | 4 Comments »

One Thing Is For Sure - Spam Does Not Sell Atlanta Real Estate

Posted by Doug Quance on May 3rd, 2008

$42 Billion To Be Spent This Year Fighting The Spam Monster

As agents, we all want the next "killer app" that will bring us new business and sell all of our listings. Many of us go to extreme measures in this regard.

When the multiple listing service (MLS) here in Georgia went online, one of the features in it was the ability to email other agents. I knew instantly that this was going to be a bad idea… and I was right. To make matters worse, you have to delete each piece of spam one at a time.

I finally gave up. Who cares if there is 1057 unread emails in my MLS box? I’m not going to read them.

Since the number no longer grows… I can only assume that the agents who were sending this crap decided it wasn’t worth the effort. Instead, they try to send it to one of my real email addresses. Now there’s a bright idea.

Don’t get me wrong… many years ago, I sent out custom emails to area agents regarding special promotions of my listings. Not every listing was broadcast - just those properties that offered a selling agent bonus. But I don’t do that, anymore.

Thirty years ago today, Gary Thuerk - a California computer salesman - sent what is regarded as the first spam email on the ARPANET… which was the precursor to the Internet. Way to go, Gary! It is unknown whether or not it was a successful campaign.

Nowadays, I use spam filters on several of my email addresses - as I often receive over 1000 spam in a single day. I kid you not. And my spam filter is a friendly blocker that simply sends a reply back to the sender asking them to reply to my email so we know that they are a real person - and not a computer spambot.

As a result, the only time I see all these ridiculous spams - including all the real estate related ones… and there are many - is when I peruse my spam queue.

Some of the spammers have caught on and reply to my spam filter so that their spam will get through - and then I have to blacklist them. Banished to the bottom of the trash heap… never to be heard from again. When blacklisted, they don’t even show up in the queue.

It’s sad that we spent $35 billion last year fighting this nuisance… as well as the lost productive time perusing spam queues.  As an agent who receives these spam from other agents, let me inform you - If I have a client for your listing, I’ll find it in the MLS! Geez, is that too hard to understand? Your best marketing tool is right under your nose!

The truth is, the best thing an agent can do for their seller clients is to list the property PROPERLY! Get the info rignt - make sure the listing is accurate - get good images uploaded to the MLS - and for God’s sake… PRICE IT PROPERLY!

 

On The Web, Rants, Technology, Trends | No Comments »

Stepping Up To The Plate With Seesmic Video Comments

Posted by Doug Quance on May 2nd, 2008

The Perfect Solution For Those Who Can Not Type

I have added Seesmic Video to our website… so now if you would like - you can post a video comment to this blog.

Seesmic is in its infancy… and we are the 200th website worldwide to adopt and install this technology. I am impressed with the ease of its operation… and believe that it will offer yet another method of communication in this tech-savvy world.

Check out the comments for an example.

 

Blog Buzz, Technology, Trends | 2 Comments »

Jose Canseco Loses His Encino CA Home To Foreclosure

Posted by Doug Quance on May 2nd, 2008

Foreclosure Crisis Now Impacting Multi-Millionaires

Former American League MVP Jose Canseco has lost his Encino, California home to foreclosure.

Canseco is also known for speaking out about steroid use in baseball, and his testimony before Congress on the subject.

"People have to understand that $35 million… you’re paying the government 41 percent… that leaves you with $17 or $18 million… not even. Then you have to take care of your whole family."

Canseco claims it just didn’t make sense to continue making payments.

"I do have a judgment on my home," Conseco said in an interview, "…it didn’t make financial sense for me to keep paying a mortgage on a home that basically owned by someone else."

Canseco also stated his two divorces cost him $7 or $8 million.

It is apparent that Canseco - like many others - is making a choice not to pay his mortgage. These people don’t want to "pay for a dead horse", so to speak.

Mr. Canseco, however, is likely to learn a new term used in real estate. It’s called a deficiency judgment… where he will likely find out that jab in his rear is not another steroid injection.

Foreclosures, On The Web, Trends | 4 Comments »

An Atlanta Real Estate Prediction

Posted by Doug Quance on May 1st, 2008

When You’ve Outgrown Your Home - But Can’t Sell It

Home Depot just announced that they will be closing 15 stores - but none in the Atlanta area - and I believe I know why.

Talking with some contractors, I have discovered that more of them are doing remodeling - and that their business is doing well. Finishing basements, renovating kitchens and bathrooms - even room additions - are their frequent requests.

I have a theory about this.

While there are many motivations for people to sell their homes and move - some of them do so because they need more room. Others want the more modern features of newer homes. Many of them love their neighborhoods and communities - and want to move up to another home within their community.

The problem is that most of them are finding it difficult  to sell - which is necessary for them to purchase their next home… or if they lower the price so that it will sell - they won’t have the down payment they want for the home they would like to buy.

This is purely  conjecture on my part - but I believe we are going to see more people deciding to stay in their existing homes and improve them, instead. Add a room - finish a basement - remodel the kitchens and bathrooms… even add a second story.

I know - this is blasphemy on a real estate brokers blog.

I just call them as I see them.

 

Rehabs, Trends | 3 Comments »

Should You Buy A Home In Today’s Atlanta Real Estate Market?

Posted by Doug Quance on April 30th, 2008

Home Purchases Today Are Not For Everyone

In a conversation with a young couple the other day, they asked me whether or not they should purchase a home - in spite of all this talk about falling values and foreclosures in the news.

"Every agent tells us that now is the time to buy," the wife exclaimed, "Who do you believe?"

I don’t have a crystal ball, nor am I a prophet. I can’t tell you what the market will be doing in a few years… but I can tell you what I believe is true.

If you are not buying for the long term - stay out of the market unless you are a very experienced buyer. If you are either buying a primary residence or a new property to use as a rental - then I would encourage you to find the best value and go for it. But if you are thinking of buying and selling withing the next few years - you need to lose that thought, immediately.

I would recommend that you consider a purchase only if you feel confident that you will hold the property for at least FIVE years.

Home ownership carries many benefits - which I won’t go into in this post - but many of those benefits can be stripped away if you sell before you have acquired equity through appreciation.

By only purchasing for the long term - you are much more likely to enjoy the full benefits that home ownership can bring. It’s like the stock market - buying stocks while the market is down is fine, as long as you are a long-term stockholder.

I know that many of my fellow Atlanta agents will disagree…

Ask The Broker, Tips For Buyers, Trends | No Comments »

Ask The Broker - Why Didn’t My Short Sale Work Out?

Posted by Doug Quance on April 24th, 2008

Your Offer Might Be Good - But It Might Not Be Workable

I got a call yesterday from a Buyer whose offer was rejected by the lender or asset manager. She read my post regarding short sales, and she wanted to know why her deal didn’t go through.

Here is my speculation I offered to her:

Short sales are often killed when there is more than one lien holder on the title… as is the case with second mortgages. What happens is that a good, legitimate offer does not allow the second lien holder to get anything out of the deal.

Let’s take a house that was bought a few years ago for $100K with no money down. The first mortgage was for $80K; the second mortgage was for $20K. You want to buy the property for $80K (which is the fair market value) and the first lien holder may accept this offer.

The trouble is that the second lien holder wants something, too. And your offer doesn’t include anything for them.

Are you going to pay more than the property is worth to make the deal work? Of course not! Is the second lien holder going to offer to remove the lien with no compensation? Of course not!

And therein lies the rub.

A few days ago, I was showing my clients a few select properties… and on one of the listings I wrote, "Won’t happen" on the paperwork. My client asked if we could go see it, since the price was so attractive.

I explained that it would be a waste of time, for the reasons above. The sale is conditonal on the bank’s approval - which we’ll never get, because of the second lien holder.

What do you do under these circumstances?

Go find another property. Properties like these will have to go through foreclosure before the sale will make sense. The second lien holder will be wiped off the title - and the first lien holder will eventually put the property on the market.

Short sales can be accomplished - though they can be slow and annoying. Keep in mind that you’ll have far less frustration in the process if you don’t use an inexperienced agent to assist you.

 

Ask The Broker, Foreclosures, Mortgages, Tips For Buyers | 2 Comments »

Atlanta Short Sales Are Becoming More Popular As Foreclosures Mount

Posted by Doug Quance on April 20th, 2008

Patience Is THE Virtue When Buying Short Sale Properties

A short sale occurs when a lender allows the sale of a property for less than is owed - and the sale takes place prior to the foreclosure. While this might sound enticing to a buyer - short sales are difficult transactions that more often than not result in a lot of wasted time with no gain.

Most lenders use asset managers to handle their short sales - who often must get the "go ahead" from secondary market owners before the sale can proceed… and if the loan has private mortgage insurance, that adds another layer of bureaucracy.

It is not uncommon to get a verbal approval within a week of presenting an offer… but no written acceptance for sometimes several weeks. I have heard of instances where this verbal approval did not result in a written agreement, as a better offer came in - and the lender accepted it, instead.

There is no shame in the game, right now.

Since next month will be a record month for the number of foreclosed properties in the greater Atlanta area, lenders will have to take all serious offers into consideration, as their non-performing inventory stacks up.

In the past, lenders would often reject perfectly sensible offers in the hopes of waiting and getting more after the foreclosure. Well the times are a changin’, as the wave of foreclosures is crashing in on itself.

It won’t make sense to walk away from a reasonable deal, now.

As a buyer, the key here is to not make stupid offers. Educate yourself about value - then find a great value. They’re all around. And be patient. Newly listed foreclosures are often overpriced, too. Pay attention to the price reductions, as that will reveal a great deal about the motivation of the seller.

Foreclosures, Investment Properties, Tips For Buyers, Trends | 3 Comments »

Atlanta Area Hits All-Time Record Number Of Foreclosures

Posted by Doug Quance on April 16th, 2008

Foreclosures Slated For May Top February’s Monster Record

Just when I thought we had seen the crest of the giant wave of foreclosures in the Atlanta area, I am yet again amazed at the whopping 7335 properties that are now slated for auction next month on the courthouse steps of the 13 counties in the greater metro area.

Back in January, Equity Depot reported the previous record of 6992 foreclosures that were slated for February auctions.

This continues a trend for buyers to be able to select some very good properties at bargain prices… and a mounting challenge for sellers of resale homes.

"How can I sell my house for that much… I owe that much!"  a prospective seller recently told me.

"The best thing you can do is wait for the market to improve… if you can,"  was my reply.

As with all properties - whether in a buyer’s or a seller’s market - the best value proposition involves one where you can add value to the property… which means the property needs updating, renovating, remodeling or restoration. At least some paint and carpet. The key is buying these properties right… and this wave of foreclosures will allow you to do just that.

The Senate has recently passed legislation designed to provide tax credits for individuals purchasing foreclosures… and the House is busy with legislation of their own. In this election year, you can be sure that something will be done… whether or not it will be good is another story.

Should you buy these properties to flip?

Absolutely not! This market will eat you alive if you try to flip houses. I see many listings that have been rehabbed nicely… but fail to sell quickly at good prices for the sellers. The demand is just not there right now.

The key strategy for this season is to acquire a property as either an owner-occupant or for rental. Remember - the rental market absorbs a huge share of those who left their homes because of foreclosure.

This opportunity is not only great for first-time homebuyers - but those who would like to move up into a bigger, nicer home. Your existing home may be a good candidate as a rental… which allows you to use a tenant to carry the cost of the existing property until the market improves and you sell for a much better price.

Current low interest rates make this proposition very attractive.

The Quick Links on the left will take you quickly to our list of distressed properties for each of the cities shown. Who knows? Maybe your next home is just a few clicks away! 

Atlanta Area News, Foreclosures, Investment Properties, Rehabs, Tips For Buyers, Trends | No Comments »

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