Changes to Portland’s real estate market bring out some interesting ideas for those who are looking to take advantage of the foreclosure situation. Sellers are often tempted by alternative avenues proposed by parties operating just under the radar of Oregon’s Real Estate Agency.  Funny how these folks won’t get licensed.

Let’s look at a recent example of a Tigard real estate listing in southwest Portland, a desirable area with convenience to everything.  Searching for hot deals in RMLS brought up this jewel:

Pre-approved Short Sale, can Close in Days!  3500 sq ft on 2 levels, 4 bedroom 2 bath, new windows, wheelchair accessible, etc, etc, etc…Sold AS-IS  $325,000.

Pictures didn’t look too bad.  Sure, it wasn’t pristine and may need a bit of sweat equity but the price was fantastic based upon description and comparable sales in the area.  Location was great, close to everything.  All factors point in the right direction.

So we arrive at the house and it looks a titch worse than in the pictures.  Beautiful kitchen shots had been taken before the owner decided to remove appliances and rip out the cabinets.  Blackberries had actually engulfed one entire side of the house as well as several trees on the property.  Garage doors were falling off and pretty much toast, but that was no biggie compared to all the soffit and window sill dry rot issues.  Oh well, still a good deal, she’s a fixer.  We’ll also have to overlook listing comments about being wheelchair accessible since there were about 4′ elevation differences all over the place and no ramps.  In the sales industry these little details are called “puffing.”  Works for the some people I guess…

People Promoting Win-Win Situations Are Often the Winners

A quick phone call to the listing agent reveals not only is this property a short sale but there’s another party involved who expects to be paid for her amazing negotiating skills.  Essentially what happened is that the seller was contacted by this win-win negotiator just prior to going into foreclosure.  Negotiator paid some of the overdue payments and/or fended off foreclosure proceedings temporarily while property was advertised for sale.  Through her incredible abilities she also convinced the seller to give her an assignable contract for sale of the house.  That contract needed to be bought out in order for any other buyer to proceed.  Cost to buyer was $15,000 (she would then assign her interest to the new buyer).  This buy-out money would not have gone towards the seller’s overdue payments/loan balance and would have essentially cost the buyer $15k more in purchase price.

What a great win-win situation!  Wait… I only count one winner, where’s the second?  Nothing like having a third party negotiator step in and take advantage of an already bad situation.  There are several of these “professional negotiators” out there now.  In fact, many are weaseled into RMLS listings.  The buyer is expected to pay for professional negotiation services of which they are not even receiving representation.

Another Avenue for Sellers in Trouble

One of the best solutions for sellers is to contact a reputable real estate broker well before foreclosure.  It’s their job to negotiate with banks, advertise, secure the best price and generally represent the client’s best interest.  No special win-win third party negotiators need to be paid!!!  Note that not all brokers deal with short sales and some that do have a special team (complete with weasel fees).  Hiring the right real estate broker will benefit sellers, banks and property buyers in the long run.

If you’re looking to buy Portland real estate, you can’t do better than to do it through us here 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!