Looking to score on awesome foreclosures or short sales in Portland Oregon?  Watch out for that middle-man fee!

Recently I had the pleasure of dealing with an interesting situation.  This involved a pre-foreclosure property for sale in Beaverton.  Although it was listed in the RMLS there were additional buyer “fees” involved I found out about after talking with the listing agent.  Although additional “negotiation service fees”, or whatever you want to call them, are not too uncommon these days it is something to watch for and I’d be interested in hearing other’s opinions regarding ethics of such.

My example came when a buyer was searching houses for sale in Portland Oregon.  He came across what looked to be a fantastic deal but was disclosed as a short sale (bank would have to approve sale price and deal with a lack of loan payoff).  I found out from the listing agent that there was middle party involved with the seller who, apparently, had a contract for purchase (option to buy at a undisclosed price).  This middle party wanted $15k to buy out the option and had no intention of actually acquiring the house.  Purchase by my buyer could not move forward without getting this party out of the picture.

Justification for paying the $15k was “negotiation work done with the bank.”  There was work done with the bank, yes, and they had come to an agreement with lien holders.  OK, great.  Was it $15k worth of work or just someone trying to make a quick buck off of a real estate transaction?  Remember, this middle party had no intention of actually aquiring the property.

Here’s a rundown; Buyer writes the offer, seller approves, middle party approves, then it goes to the bank.  Bank asks for a HUD 1 sheet (balance sheet more or less).  Bank now sees that $15k of the purchase price is going to a middle party and essentially not only are they dealing with selling short of what’s owed on the loan but an additional $15k shortage.  The bank has to potentially choose between selling short, foreclosure, counter offering, or relisting the property hoping for a better offer.  What’s the most cost effective route?

Tough spot for the bank.  They’re up against this situation more often than the general public realizes.  Ethics conversations between people in our real estate industry are strong in regards to involvement of middle parties.  Ulimately, as long as the buyer gets a good price for the house he shouldn’t care.  It’s the seller/bank side that has to deal with distribution of sale proceeds.  Many feel that it’s part of the listing Realtor’s job to deal directly and negotiate with banks, no middle party involvement.  Points are made that middle parties are taking advantage of an already bad situation involving home sellers near foreclosure.

What do you think?

For tips on dealing with Portland foreclosures and Portland short sales visit our site at www.maxwellsinclair.com.

Most home buyers have the same goal; Get a great price on a good property!  So one of the popular ideas is that you’ve got to get your hands on a foreclosure list.  Buy it from direct from the bank and save tons of money over retail.  Sounds like a super plan but are you willing to do the work?

Searching the MLS

Truth is that searching homes for sale in Portland, Beaverton, Lake Oswego or other areas is done pretty much one way, online.  Portland’s MLS system (RMLS, regional multiple listing service) is the source for 99.9% of properties advertised for sale.  Whether it’s John L Scott, Prudential, RE/Max or whoever all listings are input into RMLS.  From there the information is just redistributed to everyone’s website.  Foreclosures (bank owned properties) are typically no different.

Banks work with local Realtors to get their properties sold at fair market value as soon as possible.  Dumping them to a handful of cash buyers on courthouse step doesn’t do much for the sale price.  List them in a MLS and these properties will get a million times more exposure, bumping up the sale price.  If you’re searching online properties for sale you’re already getting the vast majority of foreclosure listings.  This may not be overly apparent because buyer’s generally don’t know who the seller is.

Portland foreclosure lists

Yep, they’re all trying to sell you something of public record.  Foreclosures are out there but today more than ever and a few of such are purchased by full-time investors for cash on the courthouse steps.  You’ve got to be there with certified funds (10% minimum in cashier’s checks) to even participate.  Seller’s (banks) won’t wait for the lucky bidder to secure conventional financing and close weeks later.  Good luck easily finding a published list outside of what’s already in the MLS.

Notice of Default lists

NOD (notice of default) lists are the only thing I know of distributed for free.  These are public notices of people who are at least 3 months behind on mortgage payments.  Lists are distributed by the title company and are the first step to potential foreclosure.  Cash buyers, Realtors, and property solutions people promoting “win-win” garbage all prey on these homeowners.  It’s a full time job for people choosing this route (trying to capture a potential easy buck) and what they’re promoting is to “save the homeowner from foreclosure.”  Some chasers are legitimate (Realtors for the most part), others not.  I’ll argue in depth about the scammers out there if you want to listen…

Short-Sale Listings

In reality these days the majority of properties go through short-sale negotiations (bank agrees to work with a seller and take a loss rather than go through the more expensive foreclosure process, losing even more $$).  Properties are listed in the MLS and you’re already seeing them within the set search parameters if they exist.  Bank representatives generally don’t give the properties away as urban myth would have you believe.  By far the majority of foreclosure and short-sales sell through Realtors on RMLS.

Summary

Late night TV is great for promoting a bunch of trash.  But if you’re willing to make it a full-time job… you may get lucky eventually.  There are easier ways of accomplishing the same goal and getting a good deal.  Contact a good Realtor in Portland!  Keep in mind too that foreclosures generally come with cosmetic or bigger issues, especially in our target price range.

I’m wrapping up my 6^th yr in real estate and figured out long ago that this avenue was a giant headache… and I love doing rehab!  Out of the thousands of people I’ve talked with about real estate I’ve met 2 folks who’ve actually purchased foreclosures on the courthouse steps and know that the one guy was barely breaking even after all was said and done.

Investigate Beaverton, Hillsboro, Tigard, Lake Oswego and Portland neighborhood information at www.MaxwellSinclair.com , we’re happy to help!

Lake Oswego offers several different neighborhoods to choose from when searching homes for sale.  Prestigious as the area is downtown still maintains a small town feel.  Walking the First Addition neighborhood and surrounding shops is warm and inviting.  Homes in this area range from early 1900′s Tudor style to 2008 constructed townhomes. Prices will remain well above Portland’s average though fall below Dunthorpe’s high-end price tags.  With land at a premium in First Addition it stands to reason that other areas within the city will have something to offer a bit further away.

Lake Grove an up and coming area neighborhood in Lake Oswego. A lot of Lake Oswego’s closer in areas have undergone development over the last 10 years. Being one of the most desirable areas to live in the Portland metro area, large remodel projects are common. Lake Grove is southeast of city center and still allows in-fill type construction. Newer homes perched within the confines of generally 1960′s models.

Not uncommon for lots to be fetching nearly $300 by the time infrastructure is in place. Ranging on the higher side of Portland’s average size they’re often 7500 square feet. It’ll be rather difficult to secure a newly completed home under $600k. For this price you’ll be looking at approximately 2400 ft. of living space. Many of these homes are designed on one level. Catering to a broad range of occupant situations they’re ideal for buyers who are done with stairs.

Feeding into top performing schools further drives attraction to the Lake Grove community. Prices have a fairly broad range from $300 to slightly under $1m. Close enough to I-5 convenience and Lake Oswego’s First Addition/downtown areas. Bridgeport Village, on of Portland’s newest shopping districts, is within a 5 minute drive. Several restaurants are also available.

Lake Grove is part of unincorporated Lake Oswego. Sewer hookup is often not available and therefore each individual homeowner is on a separate septic system. Water is supplied from the city. With city water comes privileges of using swim easements on the lake. Certain lots also have boating easements as well. Boat easements run with the land and are not transferable. This allows launching of boats on the lake that would not be permitted otherwise. Verification of home address will be required for use of several public swim beaches.

Just north of the River Grove area, Lake Grove is starting to show it’s desireability. As we work through these economic slow times currently development will continue and most likely prove to be a good investment. Buying Lake Oswego houses in any time in the remainder of 2008 should prove to be an overall great housing investment.  Continuation of sliding home prices will stop.  With this area of Portland’s upper end neighborhoods and top performing schools it’s unlikely to be getting much more affordable than the present.

Search our site for Portland MLS homes for sale at www.MaxwellSinclair.com.

Questions about Lake Oswego homes for sale or neighborhoods?  Just ask.  We’re happy to help!