REO Gold

Imagine your family in a contemporary home located in Eastgate with Bellevue schools. This home features an updated kitchen, lots of windows, atrium and natural light. Complete with newer furnace and roof, air conditioned, upgraded electrical panel, two outbuildings with heat and electric and an emergency generator converter for those wiley wind storms. This 4 bedroom, 2 bath, 2600 square foot home with a fully fenced 8538 square foot lot is listed at just $340,000.

Best bank-owned property in Renton $194,900, built in 1967, 3 bedroom, 1 bath Rambler with two-car garage. This modern looking home is set on a 9100 square foot lot, partially fenced with a deck off the kitchen. It has a wood-burning fireplace, hardwood floors, vinyl windows, bay window in kitchen, dual-basin stainless steel sink and light modern oak cabinets.

Again, the deals are out there and they are here to stay.  With a lot of mortgages resetting in 2010, we are expected to see a slough of REO properties hit the market over the next two years. 

A life of an REO property in the Pacific Northwest, Greater Seattle Eastside looks like this; the property is listed on the NWMLS, the key box is put on the day after it hits the market and there are 7 offers within the week before a “for sale” sign is even posted.  So, even though there is a deal on the table, how do you ensure you the buyer or as an agent, your buyer’s deal is the winner?

First and foremost, as a buyer you want to work with an agent who is familiar with REO properties.  The agents who are listing these properties are so busy, they don’t have time to answer questions from agents that don’t know what they are doing in regard to bank-owned property.  The REO listing agents usually have detailed instructions and attached forms or websites where these can be obtained. 

Different from foreclosure properties, you can perform an inspection on an REO property, however you will likely want to tighten up the time frame for completing this inspection.  For instance, instead of the ten default days; consider three days.  You will also want to make sure you have a pre-approval letter or proof of funds for cash deals available with the purchase and sale just like any other transaction.

When the agent receives the offers; they do not fax them over to the asset manager, instead they login to a program and submit the details of the offer to the lender.  You will not likely be putting an offer expiration date on your offer; until you reach mutual acceptance offers can still be submitted.  When the bank receives multiple offers, they will likely have the agent call each buyer’s agent/buyer and ask for “highest and best” an industry term for the highest and best offer.

You will really want to make sure you know your values or at least your agent does.  For instance, I just posted a deal in Seahurst on September 8th.  The home was a 1948 brick home with a finished basement, 2020 SF, on a 9500 SF lot, 3 bedroom, 2 bath with a two-car garage listed at $244,900.  The county had the property assessed at $355,000, which seemed like a great deal, however the new 2010 tax assessment was set at $286,000.  So you do want to be the winner for a home you want to live in or at least decide to purchase as a long-term investment, but you don’t want to get caught up in being the winner of the war at too high a price.

In summary, in today’s market deals are everywhere.  Short sales can  have buyers in limbo for up to ten months; REO’s move faster but it can still be a nail bitting experience; foreclosures are purchased sight unseen and you cannot do an inspection.  So make sure your goals align with what properties you want to consider; because of the distressed property market, those sellers who need to sell and are not distressed have a lot of competition so they will need to consider dealing at the negotiating table.

Between September 6th and September 8th, there were 53 short sale properties that hit the King and Snohomish County markets.  My top picks for today; a Bennett resale, 4 bedroom, 2.5 bath, 3-car garage, built in 2007 on a 1 acre lot listed for $495,000; currently assessed by the county at $667,000, located in Marysville.  For someone who is looking in a lower price range you might also consider a 2280 SF, 4 bedroom, 2.5 bath, 2007 home with a 2-car garage also in Marysville for $267,500.  Closer to Boeing; check out this 2-bedroom, 1-bath, 1536 SF home in Everett for just $180,000, complete with Bay views.  For those wanting a location a little more South and in King County; a 3 bedroom, 2-bath Cape Cod home in Shoreline, 1360 SF on a 9982 SF lot for $299,950.

Six REO listings hit the market and I had two top picks for these deals.  First, a 3-bedroom, 2-bath Edmonds home, 2284 SF on a 12,196 SF lot for $255,000; over $100,000 under the county assessment.  The second a Kirkland home on a 10,340 SF lot for $360,000; a 3-bedroom, 2.75 bath with a 2-car garage at 1860 SF.