Foreclosure Pain

"What about lease option or rent-to-own?" my state auditor asked me. "Are they for real?"

"of course they are!" I answered. "It all depends on the terms you can negotiate, and your ability to meet those terms....Why do you ask?"

Because, it turns out, my state auditor recently lost his Magnolia home of over ten years to foreclosure. His story is tragic and reflects the pain that foreclosure costs many homeowners in today's economy.

He and his wife were hardworking Philippine emigrants, she from Canada and he now a US citizen, believing strongly that ours is indeed the land of opportunity. Then his wife got breast cancer about five years ago. The chemotherapy and radiation therapy destroyed her heart. She almost died. She was fortunate to receive a heart transplant.

In the mean time, their medical bills mounted. She had made more money than he as a medical technician; he had a good state job. But now without her income, they could not pay her medical bills and make ends meet.

He applied for and received a loan modification on the house. He made the first two months payments, but was short on the third. He asked the bank if they could wait a week for the balance of the funds. The bank said no.

She lived. But they lost their house. In the process, he lost his faith in the United States (as did LuAnn Lavine in our previous post). They now plan to move to Canada when he retires in three years - but he was still wondering if maybe, maybe they could own a home again. Maybe, with rent-to-own?

Creative acquisition techniques may be the only option for future homeowners, given that so many people have been challenged in this economy. Lease purchase, rent-to-own, options and seller financing are some of the techniques that deserving buyers may use to purchase a home in a tight lending environment, where the banks are faceless, heartless corporate entities, and where 50% of all deserving buyers cannot get loans.

So yes, there are good deals out there on foreclosures. And while each foreclosure represents someone's heartache and pain, savvy buyers are jumping into the housing market where others can no longer go and providing new opportunities for someone else to have a home they can afford. Where one door closes, another opens....

And so yes, Mr. Auditor, rent-to-own is certainly an option for you and your wife. Just make sure that you are doing business with someone you trust, and that you are represented by someone who cares about giving you another opportunity to believe in the goodness of our country....

More Foreclosures in Seattle

RealtyTrac reports that there are 1million homes nationwide that should have received default notices or gone to foreclosure auction, which will be delayed into next year. In addition, the length of time it takes to foreclose on a home has increased. Some believe that this "shadow inventory" of foreclosures will forestall the housing market recovery until at least 2015.

Seven investors and homebuyers showed up for yesterday's Tour of Seattle Foreclosures to take a look at five 3BR foreclosed homes in nice North Seattle neighborhoods of Broadview, Green Lake, Greenwood and Ballard. A few of them are considering making offers on these homes. As mentioned in my previous post, there are not a lot of foreclosures in these nicer neighborhoods of Seattle -- but do they represent a significantly better deal than prices offered by private sellers?

Let's take a look at the statistics for this particular area of North Seattle as an example.

According to the NWMLS, there were 28 sales of banked-owned 3BR single family homes in this part of North Seattle in the past six months. The median sales price of these homes was $332,500, and they sold on average in about 87 days.

During the same timeframe and in the same area, there were 354 sales of 3BR single family homes sold privately. The median sales price of these homes was $400,000, and they sold on average in about 47 days.

So while bank REOs represent only 4% of the total inventory, approximately 7% of all sales of 3BR homes in North Seattle in the past six months were REOs; they were sold at a discount of approximately 17% of other sales prices (eg. sold for 83% of the value of private sales); and they took 85% longer to sell.

So yes, REOs do represent an opportunity for investors and other buyers to get a home at a good discount. Patience and due diligence are key in finding the right bargains for homebuyers and investors.

Seattle Foreclosures

There are 265 bank-owned, foreclosed properties in Seattle currently listed for sale on the NWMLS. Tomorrow, we will be offering a FREE tour of five of those properties. The tour begins at 1 pm, at the first house on the tour: 12743 3rd Ave NW in Broadview.

Of the 265 bank-owned (or "REO") properties in Seattle, the average REO has three bedrooms and approximately 1346sf, and the current average list price is $226,000 (median price of $180,000 - which means half the REOs cost more and half the REOs cost less).

There are three REO properties with asking prices over $1million. The most expensive REO currently listed is a seven bedroom waterfront home with 4560sf that has been on the market for 831 days. It is offered at $1,329,000. Tax-assessed value on this home is $1,680,000.

There are 41 Seattle REOs with at least three bedrooms priced under $180,000. Virtually all of these are located to the south of Seward Park in the southeast end of the City; or south of White Center in the southwest end of the City.

Popular neighborhoods like Ballard have only four REOs currently listed; Fremont, Maple Leaf, Green Lake and Leschi each have one; Greenwood three; and Haller Lake four. Capitol Hill has two.

523 REOs have been sold in Seattle in the last six months, with an average size of 1500sf with three bedrooms and 1.75 baths. The average sales price was $239,000 (median $205,000). Median days on market was 76 (half sold faster, half slower).

There have been 82 sales of Seattle REOs in the last 30 days. In the last 30 days, most of the sales of three-bedroom REOs under $205,000 have taken place south of White Center in southwest Seattle.

Our tour tomorrow focuses on three bedroom homes in more desirable neighborhoods of Seattle like Broadview, Greenwood, Green Lake and Ballard. No reservations are necessary, and the tour is free. For more information, please call our 24/7 real estate recorded information line at 888-621-4999 x4.

FREE Tour of Seattle Foreclosures!

It was reported this morning on NPR that 60% of all homes sold nationally are foreclosures. Buyers and investors are looking for bargains, and bank-owned properties offer significant discounts over retail, private sales.

If you are looking for foreclosed bargains in Seattle, you are welcome to join our FREE Tour of Seattle foreclosures this Sunday. Just show up at the first house at 1 pm SHARP! (Please note that times are exact, so don't be late)!

The first house on the tour is located in Broadview, at 12743 3rd Ave NW. Here is the tentative schedule this Sunday:

1 – 1:15pm: 12743 3rd Ave NW $269,000
1:25 – 1:40pm: 9242 Palatine Ave Ct N $449,000
1:50 – 2:05pm: 701 N 86th St $299,000
2:15 – 2:30pm: 330 NW 75th St $350,200
2:40 – 2:55pm: 8537 19th Ave NW $499,900

You will pick up maps and detailed listing information at the first house.

No reservations are necessary; no sales pressure, no obligation. You drive your own vehicle, so you may stop at whichever homes you wish to see. As a part of a larger group, you will have opportunities to learn from the constructive comments of your fellow tour members.

For more information, please message me privately or contact our 24/7 recorded information hotline at 888-621-4999 x4.

Bank-Owned and Foreclosed Properties in N Seattle

Our final Tour of Seattle Homes this month features three-bedroom REO ("Real Estate Owned") or bank-owned properties. The Tour will be held from 1-3 pm this Sunday, August 28 - and no reservations are necessary. Just show up at 1pm sharp at the first house on the tour to pick up maps, directions, and more detailed information.

There will be five houses on the tour, each with a minimum of three bedrooms, ranging in list price from $269,000 to just under $500,000. These houses have an average size of 2112sf and have been on the market for an average of 95 days. Broadview, Greenwood, Green Lake and Ballard are the desirable North Seattle neighborhoods where these properties are located.

The first house on the tour is located in Broadview, at 12743 3rd Ave NW. A proposed schedule of homes on the tour will be posted on this blog tomorrow.

The Sunday Tours of Homes are led by myself, Wendy Ceccherelli, Designated Broker for Home Land Investment Properties, Inc. I am an experienced real estate investor, and the tour provides valuable guidance for first time home buyers, real estate investors and other bargain house-hunters.

To be notified of upcoming Sunday Tours of Homes, call our free 24/7 recorded real estate hotline at 888-621-4999 x4.