Sunday, May 31, 2009

Those of you who are bottom-feeders are just trying too darned hard. How many times have I fielded phone calls requesting foreclosure lists or short sale lists?

As always, sifting through the data to learn the truth is the hard part. Our Multiple Listing Service (MLS) reports 119 short sales between Key West and Big Pine Key. There are 1,074 market listings in the MLS and 13 listings identified as bank owned.

An online database available to consumers reports 95 foreclosed properties in the same area. Since that data shows only half as many listings as we truly have, it's hard to believe there are four times as many foreclosures.

Let me get out my pencil with the sharpest point and say there is somewhere between 13 and 95 bank-owned properties being actively marketed. More or less.

The lesson for the week is: Consider all the possibilities.

Short sales are anything but. The "Slowskys" would love them. These transactions move about as fast as rush-hour traffic in Los Angeles.

Don't make big plans for negotiating a short sale transaction. The seller's underlying mortgage holder is as rigid as a four-day-old corpse.

That note-holder faces losing money, and irate shareholders and board members. They will resist negotiating price or paying closing costs. They will drag their feet like a prisoner in leg irons, hoping for an improvement in the market or an Obama bailout.

As a short sale, the seller's lender has a slow payer on their books. They seem to find that eminently more favorable than having the asset (repossessed house) on their books.

It's easy to imagine them weighing the two: delinquent accounts receivable in the left hand, failed asset plus associated expenses and operating costs in the right. "Hmmm. Yeah, before you file the foreclosure papers, let's have a little chat."

Consumers love to buy foreclosures. Nothing smells more like carnations in a hearse like a foreclosure.

Likewise, the banks are eager to sell their REO's (the acronym on their balance sheet for real estate owned.) Financial institutions like collecting deposits, not houses.

Savvy Realtors who represent buyers may share the secret: The password is "negotiation." We find that banks often negotiate both price AND terms. With the help of an experienced buyer's agent, the buyer may get a good deal on the price and persuade the bank-seller to pay some closing costs, too.

The bank wants a smooth, fast closing. Be prepared to be at the closing table on the agreed closing day or risk big cash penalties.

Scorn not the market rate sale, however. To compete with short sales (which could be just smoke and mirrors and not closeable at all) and foreclosures, most sellers have to be prepared to list their house at a comparable price. Buyers will be surprised to learn they can get a great bargain on the non-troubled sales, too.

Sellers may be willing to pay some closing costs. They might consider financing part of the price, too.

Many short sales and foreclosure houses suffered damage, vandalism and neglect. On closing day, it's hard to say what will happen when you flip the light switch. You might get light. You might get water. You might even get a big "boom"!

The market rate seller may have no such stigma. So buyers seeking an attractive, clean, well-designed and decorated home should start here.

It's a great time to buy a home. Bargains are rampant. Rip those blinders off and look at ALL the properties in the targeted price range.

What do you think?

Regina E. Corcoran, SRA, is a Florida real estate broker, state-certified residential appraiser and residential contractor. She is president of AmeriRealty Corp. and vice president of AmeriMortgage Corp. She can be reached at ReginaECorcoran@cs.com. Corcoran writes her column exclusively for The Citizen. It appears every other Sunday.