Alex Kollar Schorsch

That's a big question, isn't it! I personally feel that it hasn't yet done either. There are still major pockets like the SW and S that are stil taking a beating with shortsales and foreclosures and I believe will continue to as the mortgage/credit markets continue to be crunched. Other areas are more stable and prices are continuing to reflect the abundance of inventory-that is a downward pressure-However, there do appear to be more buyers sniffing around, but still not flocking to buy-the waiting game is still out there and other than distressed sales in lower end prices, I think the $300-500 range will have to drop some more to support sales in that market.

That's my 2 cents worth! - Thu Jun 19 2008, 11:27

Hi Larry-

First of all, remember, foreclosure is a process that doesn't happen overnight, so most any property that you look at be it a short sale, auction or REO will have some history on the market. Lenders have an obligation to shareholders etc. to try to limit their loss which may be while agents are showing you properties with a market history.

Further, I answered a question very similar to you request several days ago, along with a number of other agents. In general, the advice that was given was that pre-foreclosure properties (short sales) where not always the deal the might appear to be at first glance, the price has not been truly established at the point it is a short sale, as the lender is interested in minimizing their loss and in a short sale, you are negotiating with both the lender and the home owner-This process can take weeks-more likely-monthly to finalize and can frequently end in multiple offers and a bidding war.

REO's or bank/lender owned properties have already gone thru the auction process and didn't sell. The ownership has now defaulted back to the bank/lender. These are a bit easier to deal with in terms of a timeline and a price, although they too can receive multiple offers that are bid up. Frequently, these properties do not have ulitities turned on for you to complete adequate inspection, unless you are willing to cover the cost of re-establishing service.

Auction properties are literally those that are auctioned off on the country court house steps. Unless you have been able to see and inspect the property before it hits auction, you are taking a great risk on what you are buying. If you are a position where this type of risk would not be finacially devasting if the house had major defects or you have a construction team to go in and quickly bring the property up to standard, this a be a good place for you to concentrate.

As for finding deals that are pennies on the dollar, I refer you back to the 1st answer. The Tucson market has taken a hit, but houses are not going for half their recent worth, nor do the market gurus expect that outcome.

I am sure that you have looked at Realty Trac-You can also find properties moving down the path to foreclosure on varieous lender and bank site-Try Well Fargo, Countrywide etc. Or I will be happy to show you properties that make good investment sense-they may be at any stage of the forclosure cycle, or they may just be priced right for the market. - Sun May 25 2008, 16:16

Hi Mark-

I must agree with the other posters with regards REO's (bank/lender owned) properties as preferable to trying to buy a short sale. Short sales take much longer to negotiate for many of the reasons given below. With an REO, while there may still be some negotiation and with really low priced properties, the potential for multiple offers and bidding up the price beyond what is listed, the process moves much more quickly.

In either case, it is really important to use a real estate professional to guide you thru the process. If you have been looking at these types of sales online, you no doubt have seen statements such as "AS IS, WHERE IS", "No SPDS (seller's disclosure statments), No Clue (claims history from the property insurer)", "Property Winterized-Seller will not turn utilities on for inspection".

All of these types of statements mean BUYER BEWARE-the seller, in most cases, the lender is telling you upfront thay they make no warranties as to the condition of the property and are not going out of their way to assist you in determining the properties condition, and many REO/short sale properties have ultimately been neglected or even damanaged. Under these types of conditions, it is really important to have a REALTOR working for you to arrange for inspections etc. so you know what you might be getting into in terms of repairs, title issues and value.

So, while there are some great deals to invest in, work with a professional to protect that investment from the get on. I stay as on top of this market as possible for several other clients and would be happy to do so for you as well-I can set up automatic e-mails that will alert you to properties that meet your investment criteria.

As far as other resources for IDing REO's, many home lenders have their own sites, frequently in partnership with a company that handles foreclosures for them-I have included an example from Wells Fargo.

And to Myke-I commend you for your knowledge of this rather confusing part of the real estate market and the good advise you provided another buyer.

Good Luck-

Alex Kollar Schorsch - Thu May 22 2008, 18:29

Jason-

Michael's response below is excellent and comprehensive. He clearly know his lofts!

Good Luck! - Mon May 12 2008, 18:43

Hi Judy-

I think your question got mis-directed to Tucson 'Voices' as we have a Barrio Santa Rosa and I think you are asking about Santa Rosa, CA-If you have been receiving responses from that area, you might re-phrase your question to include California.

In Arizona, you can go to the State Department of Education website to research cirriculum, rank, academic focus on any given school-I would think you can do the same in CA.

Good Luck! - Mon May 12 2008, 11:54