Benny Chavez (Prudential California Realty)

I don't mean it's getting hot as in weather here in sunny California, what I mean is the amount of buyers around

the corner when another low priced foreclosure hits the market. It almost felt like I had a sticker on the back of

my car that read: "FOLLOW ME TO A LOW PRICED REPO!" What point am I trying to make you might ask? Well

contrary to media reports I am going to go ahead and say that in my local market buyers are buying up all the

repos like funnel cake! I mean we've got agents in my office writing offers on repos that I am writing offers on. I

spoke to a asset manager who stated they have been receiveing an average of 19 offers on every repo they list

in my local area! What many of the buyers fighting over these repos don't realize is that you can also find a

great investment on a regular sale home. Statistics show that 50% of my market is short pay sales and

foreclosures and the other 50% is regular sales. Unbelievable?? I think not! I actually had 2 clients under

contract on 2 regular sales in January, my clients decided to buy a regular sale instead of a bank owned because

they felt they were competing with many buyers on homes that were very beat up with no history of repairs done

by previous homeowners. Last but not least these clients often noticed they could get a regular sale in great

shape for less than what it would cost to get a repo habitable. There are currently 50 active bank repos in my

area and 56 repos under contract. What will eventually happen? They will all be gone, a memory will only be at

the back of our heads to remind us of a time when again the media has been taking everyone for a long ride!

THIS SHOULD HAVE BEEN TITLED : BASIS FOR WRITING A CORRECT OFFER

• First you must understand that banks have decided on the price by having individual brokers give broker price opinions on the asset/property

• You must also understand that brokers giving the bank a price opinion will sometimes give a higher value to get a listing, this is not common when the broker has been doing bank owned for a while. It is seen mostly with new brokers trying to get an REO account

• When the opinion is over priced you will see the listing price drop after a few weeks, usually due to someone writing a offer based on recent comparables

• When someone submits a offer based on comparables and it is lower than the listed price banks will send out an appraiser to verify what is really happening

AND NOW THE DETAILS

• YOU MUST BASE YOUR OFFER ON THE LOCAL RECENT SALES COMPS NO EXCEPTIONS

• JUST BECAUSE THE PRICE IS $370,000 DOESN'T MEAN THE BANK WILL TAKE $370,000

• EXPECT TO BE ON THE TABLE WITH MULTIPLE OFFERS IF THE COMPS ARE HIGHER THAN LIST PRICE

• YOUR OFFER IS NOT BETTER BECAUSE YOU HAVE 20% DOWN

• YOUR OFFER IS NOT BETTER BECAUSE YOU DIDN'T ASK FOR CLOSING COSTS REMEMBER :NET

• YOUR OFFER IS BETTER BECAUSE IT NETS THE MOST TO THE BANK

• YOUR OFFER IS BETTER BECAUSE IT HAS A GOOD ESCROW LENGTH

• YOUR OFFER IS BETTER BECAUSE YOU HAVE A DIRECT UNDERWRITTEN APPROVAL FOR LOAN

• YOUR OFFER IS BETTER BECAUSE YOU HAVE A NO LOAN CONTINGENCY (RISKY) BUT GETS ATTN!

HOPE SOME OF THESE TIPS ARE HELPFUL IN GETTING YOUR OFFERS ACCEPTED!!

So I was previewing homes in my local market Downey, California and decided to snap a quick one with my Palm Treo........ hope you enjoy from the album cover of Now & Then

And how it looked in the album Now and Then

Remember this is only a prediction and nothing more, maybe we will look back at this and say ..... boy

was that Benny Chavez guy off, or maybe boy was that Benny Chavez guy on the money! I will mention

that I have taken plenty of real facts into account when deciding what I would predict would happen so

here it goes:

• 2009 Will bring double the amount of forclosures than 2008

• The amount of forclosures will make some markets drop price by 10%

• Interest rates will remain within 5 and 6 % till 2010

• Many markets will have a stimulated local economy due to various real estate transactions

• Lenders will continue to use high standards to qualify

• The high end markets will be experiencing fewer sales, hows 10% off of 1,000,000?

• People will lose homes this year but a positve look will be that the large inventory of forclosures will cause for a price drop, allowing first time buyers who didn't qualify 6 months ago to now qualify

• Investors will be able to buy properties that will produce immediate cash flow

• Agents who are still in the business are more educated to this market, have more stats and tools to better service clients

GOOD LUCK IN 2009! MAY SELLERS SELL, BUYERS BUY, AND INVESTORS FLIP!

Bank Owned properties or R.E.O (real estated owned by a corporate entity) sales are much easier than a

short sale. The only problem with a reo is the conditions of the transaction. In most cases the bank will

sell the property in as-is condition. Depending on the kind of financing you have in place, some lenders

will not close the escrow if the home is not habitable. In the case of the price, the price is usually set low

to attract a lot of attention. We have come up with the conclusion that on average it takes 22 showings to

generate 1 offer on a property. By setting the price below market value, the reo usually will receive

multiple offers depending on the condition and location. Thus driving the price closer to market value.

Some drawbacks with reo's is the fact that you have no history on the home you are aquiring as compared

to a normal sale where a homeowner will disclose material facts about the home. Banks are waived the

obligation of completing a transfer disclosure statement. The home comes with no warranties and you

might not receive concessions on some reos, such as closing costs, termite repair, or any other requests

you may have. Banks are also asking for less time on contingencies. You might only get 9 days to

appraise and inspect the home you are interested in. Do keep in mind that the few things that you miss

out on by buying an reo are compensated for with price.