Paul Roesch, St Louis Real Estate Auctions AARE, CDPE

Whether you’re a buyer’s agent looking for investment properties or a listing agent looking for REO homes, 2010 marks the beginning of a decade of unprecedented opportunity. Rick Sharga senior vice president at RealtyTrac has done a nice job of answering some of the most frequently asked questions about the foreclosure market.

Q: What’s the outlook for foreclosure activity in 2010?

A: It’s likely that we’ll set a new record in terms of overall foreclosure activity for the fourth consecutive year. Over 1.3 million U.S. households received a foreclosure notice in 2007; over 2.3 million received notices in 2008; and although the 2009 numbers haven’t been completely counted as this issue goes to press, there will be somewhere in the vicinity of 2.8 to 3 million households in foreclosure. We’re likely to see more than this in 2010, with the number of homeowners in foreclosure probably exceeding 3.5 million, before the trend begins to reverse itself sometime in 2011.

Q: Will we see a flood of REOs?

A: Investors, home buyers and real estate professionals have all been anxiously awaiting a tidal wave of REOs for the past two years. Instead, inventory levels have remained frustratingly low, even in some of the hardest-hit foreclosure markets. Expect more of the same in 2010.

What this means for buyers and sellers is that there will be limited availability of REOs, albeit at higher-than-normal levels. No flood, but a good chance that the trickle on the market today will grow to a more steady stream. While this makes it less likely that we’ll see a “double dip” in home prices, we also won’t see much price appreciation until these distressed assets are finally gobbled up. The most likely scenario is a long, relatively flat period of recovery in the housing market.

Q: Will there be a surge in short sales?

A: A big frustration for potential foreclosure buyers has been the difficulty in buying a property via short sale. Agents have questioned why banks reject a short sale offer 20% below the mortgage amount only to spend tens of thousands of dollars to foreclose on the home and then sell it as an REO at a 50% discount.

We’ll see an increase in the number of short sales if the Treasury Department has anything to say about it. Lenders participating in the Obama Administration’s loan modification program will be strongly encouraged to offer any homeowner who doesn’t meet the requirements for HAMP (Home Affordable Modification Program) a short sale opportunity as an alternative to foreclosure.

But short sales won’t be a panacea, either. In many cases, the presence of a second loan will make negotiating a short sale much more difficult; in other cases, the owner of the primary loan might foreclose on the home, wipe out the second loan, and sell the home, using the amount of the second loan as a “market discount” to move the property.

Q: What are the implications for real estate professionals?

A: Working with foreclosure properties will require diligence, persistence and patience. But there has never been a market with as much inventory to choose from, and the combination of deeply discounted pricing and historically low interest rates make many deals once-in-a-lifetime opportunities.

Read the story

Why Would Someone Want to Sell Real Estate at Auction?

* An auction is an event
* Property is sold on a specific date
* Everything is disclosed up front
* The only negotiation is price
* All negotiation is open and public
* Delivers 100% of present cash market value
* Selling as is where is with no fix up expense or repair contingencies
* All cash no contingency contract with 30-day closing
* Buyer pays closing costs
* No seller commissions!

AUCTION MYTH: AUCTIONS ARE FIRE SALES WHERE YOU GIVE AWAY PROPERTY!

AUCTION FACT: A properly advertised and promoted auction will deliver 100% of the present cash market value for a property 100% of the time!

There is a mentality amongst auction buyers that if someone is going to steal it, then it's going to be me and they pay full market value every time!

Learn more about the benefits of a Real Auction

January 2010 marked the first time in 18 months that more homes were listed “for sale” compared to the previous month, with an additional 15,000 homes, or a 2.9% increase, listed for sale compared to December 2009 according to the January Housing Inventory Index, a survey of Multiple Listing Service (MLS) listed homes in 27 major U.S. housing markets conducted by the national real estate brokerage ZipRealty.

Serious sellers need to list their home now, rather than wait for the spring, to capitalize on buyers looking to take advantage of the tax credit extension.

Read more

A new study from PMI Mortgage Insurance Co. suggests home prices have found their bottom.

The company’s analysis shows that by almost all measures, residential property values began stabilizing considerably during the second and third quarters of last year – and monthly data through November confirms that this stabilization continued into the fourth quarter. PMI says the likelihood that home prices will drop lower over the next 24 months is diminishing for most large metro markets.

PMI says excess housing supplies and rising foreclosure rates, coupled with increasing unemployment place downward pressure on house price appreciation and could drive prices lower over the next two years. On the other hand, increased affordability and declining foreclosure rates in some MSAs are helping lower risk scores in many areas, the report said.

Read the report

The easiest way to do your part and help the environment is to simply recycle. It’s also one of the most effective ways to conserve natural resources, create less pollution and reduce the amount of waste sent to the landfill.

Seventy-five percent of the waste we generate in American homes is recyclable but less than 35% is actually making it to a recycling center.

Know Your Numbers: All plastic containers have a little number inside recycling arrows located on the bottom which identifies the type of plastic used to make the product. Many local curbside recycling programs accept products marked with a No. 1 or No. 2 but some take all seven types of plastic.

It Makes Cents: Throwing aluminum cans in the trash is like throwing money out the window. Recycled aluminum is turned into new cans in less than 90 days and it can be recycled over and over again. It takes 95% less energy to make a can from recycled materials and produces 97% less water pollution. So choose beverages in aluminum and recycle every can.

Speak With Your Wallet: Filling your curbside-recycling bin is just the beginning. Complete the circle by seeking out products made from recycled content—especially post-consumer content. That’s the materials you recycle and not the scraps on factory floors.

Recycle Your Way to Less Waste