Vicki

Cool! Wish us luck! We're trying - again - for an REO property in Palm Springs. Honestly, I've never had so much trouble giving someone our money. - Fri Jun 13 2008, 13:38

OK, so hypothetically speaking, if a Canadian wanted to buy a home and was willing to pay cash - no financing - and the entire amount was deposited at the start of escrow, would they then be "seasoned" by the time escrow closes - say 6 to 8 weeks later? - Fri Jun 13 2008, 12:57

Thanks for this info. I'll be sure to check everything related to the HOA. It's much the same as here it seems, where we own a rental condo. - Mon May 5 2008, 13:50

OK, the condo we offered on is now listed on Realty Trac with a median market value of $146,000. That's nuts! It hasn't shown up on MLS yet, however. Our agent is working today on getting any info he can on it. - Mon May 5 2008, 08:42

Wow, such wonderful input. Thanks everyone. We do have an agent who advises us that on that particular unit we can do nothing but wait until that condo is listed with an agent by the lender as REO at which point we can put in an offer and see if it flies. And I guess there's no timetable on that either. We have to wait until the bank has it appraised after the owner/occupant has moved out.

We're still looking around but that community is the one we decided we wanted to be in after looking at umpteen developments throughout the Coachella valley. And as we wait more units go to short sale listings, which we are now avoiding.

In the meantime, lenders are becoming increasingly risk-averse. Whereas we were required to put dpwn 20%, that's now gone to 25% and our mortgage broker says he expects it will hit 30% for Canadians such as ourselves.

I have never had so much trouble trying to give someone our money!

What a mess! - Sun Apr 27 2008, 14:58

I've been hearing a lot of horror tales like this both from this site and other sources. What a mess! Those who think the real estate crisis in the US has "hit bottom" are either 1) clueless about the goings on in the marketplace or 2) following the spin method of "If you say it's true long enough and loud enough, people will believe it's true."

We are still hoping to buy in PS but have come to believe that the only way to go is to wait until it is foreclosed on and then deal with the lender's agent.

Thanks though for all your input. - Tue Apr 22 2008, 10:33

All these responses were very helpful.
I'm an experienced business woman, and I rent out a furnished condo that I own here in Edmonton. But I'm a newbie at short sales. An action plan is formulating in my mind but I'd appreciate info from Mike and the realtors.
Our PS agent has done a great job for us, and I suspect the value of our deal is considerably less than he is used working with, so seeing that he gets the value of his commission on this would be important to us.
Having said that, I'm considering modifying Mike's approach by working in tandem with the agent. I would contact the lender's Loss Mitigation department manager and ask the agent to provide me with photos and comps to back up my offer.
Any advice? Realtors, how would you react? - Sun Apr 20 2008, 13:42

Thanks everyone. Our realtor was told our offer "wasn't strong enough." I guess the owner's 10 price reductions over 360 days was news to the lender? Amazing! We are pre-approved for an amount 25% higher than the most recent list price - had agreed to pay the closing costs ourselves - and this happens. We are reluctant to look at anything that isn't REO now and these are in terrible shape.

Have another question about lenders that I am going to post in the Financing category. Perhaps you can help me with that as well? - Sun Apr 20 2008, 11:44

We bought a rental condo last August and paid cash drawn on a home equity line of credit on which we pay 6.09% fixed. At the time the bank agent told me that they won't offer mortgages on US property. So, I'm thinking now of refinancing the Edmonton condo. Our bank is offering a five-year closed variable rate mortgage at 4.25%. In Palm Springs we are working with a broker that has a lot of experience with Canadian clients and I shudder to think what rates and terms will eventually hit before sanity returns to the US real estate scene.

Thanks to everyone for their input. I may be back after I talk to our bank here in Edmonton. - Mon May 5 2008, 08:40

John, we made a "shopping trip" to PS in March. Our experience may prove useful.

Prior to leaving Edmonton, we had identified 25 listings in the valley that were in our price range and met our needs. The agent we are working with and I scoured listings via the web to come up with the list. He was particularly helpful in warning us of areas that were high-crime, rated low for appreciation or were in the flight path of the airport, for example.

Once there my husband and I drove to the various communities in which the listings were located. Some we took off the list right away if we weren't impressed with the condition of the complex, or the location. For example, we found that if the gates of the "gated" community swung open for us regardless of the fact we weren't residents, invariably the complex was in less than suitable condition.

The next day we met with our agent and told him which were off the list, before driving around with him to view those that remained. We narrowed down our search to one community, then one unit within the community and put in an offer on a short sale. The lender accepted it, asked us to deposit the cheque to open escrow, but before we could do that later that day, our agent was told the lender had decided to foreclose.

We found very few "regular resales." Our agent said that was because agents were advising sellers that if they didn't have to sell to hold off because the market was flooded with short sales and REOs lowering the overall market prices. Our experience with short sales says to us that you have to know everything about the owner's situation: amount owed (on one or more mortgages), has he/she received a Notice of Default, how much is the client in default, when was the NOD sent, the seller's resources if the bank wants him/her to top up a short sale offer, who the lender is and what has proven to be their response to short sales.

We are still looking but mostly in a waiting pattern until fall since many of the listings we're interested in in this community are short sales still. My own opinion is that an REO is the best way to go, because the decision making process seems more straightforward and faster.

To my mind, advance preparation and getting as many facts about a listing that interests you is valuable, regardless of the process. And I agree that finding the community you want is the most important thing, particularly if it's a unit you plan to occupy yourself, and not just rent out. - Sun Apr 27 2008, 15:23