Keith Callister

Good morning everyone, I came across an interesting article that has some good ideas in it. And I was going to share it with you, but I wanted to add a little of my own info as well. Increasingly people are hearing about what great deals you can get at the foreclosure auction, but most people don't know how to make that happen, they'd love to get a good deal, but don't know how, so here are a few things that you may want to know before heading out to the auction to get that sweet deal.

PS- Most of this info is specific to the Utah Market

1-You will need a cashier's check for $5,000 This is where a lot of people get caught off guard. to be able to bid at any auction that I have been to in the last 5 years, you need a cashiers check for $5,000. If you don't have it, your bids will not be accepted.

2-You will have to pay cash Generally speaking you will have a very short period of time, and by very short period of time I mean 24 hours, to get the funds to the foreclosure "trustee" (trustee is just a fancy word for attorney who is handling the foreclosure). There are a lot of options here, the most popular of which is to use "Hard Money" as a sort of bridge loan until you can get it refinanced into a conventional loan.

3- You may not be able to see the inside of the property Depending on the situation, you may ot be able to see the inside of the home that you are interested in, this is just how it is, some homeowners will let you see it, some won't. If it's listed with a real estate agent there's a lot better chance you'll get to see it.

4- Be realistic in your expectations We've all seen the commercials saying you can buy a home for $15,000 and the truth is you can, but probably not in Utah, and if you are hoping to pay $100,000 for a $200,000 home well you may be a little disappointed. the fact of the matter is, on a foreclosure property if you can buy it for 80% of market value, you just got an awesome deal. Be realistic (besides 40K off of 200K is a sweet deal is it not?)

5- Stay detached Don't get attached to any one property, or chances are you will pay too much for it. Don't get excited at the bidding, when you reach your ceiling you are done, don't get emotional about the process.

6- Consider looking at Short Sales This is another way to get a property at a great deal, and it avoids a lot of the hard things about getting a home at auction. A short sale is just when the bank that is foreclosing accepts less than what is owed to get the property sold. Generally you can use conventional financing and will have plenty of time to look at and through the property. Honestly, you can get just as good of a deal on a short sale as you can on a foreclosure deal. Sometime short sales are also called pre-foreclosure deals.

Thanks and have a great day!

Keith

"Travel only with thy equals or betters; if there are none, travel alone" -The Dhammapada

Why is a housing downturn a good thing?

This is an interesting question, and one that is not too difficult to answer, but it takes some understanding. For many years we saw house prices soaring, and with that an increasing number of people started buying homes, some because of the availability of financing, others because of the fear that if they didn't buy right away, they would not be able to afford a home in the future. Whichever reason it was the fact that demand outweighed supply caused house prices to escalate so quickly that many first time home buyers were priced right out of the market.

With home prices in decline it bring the affordability factor back to a normal level, which is how we are going to move the inventory that we have in Utah right now, this downturn is the healthiest thing that could have happened to us, now it is coinciding with a larger scale economic downturn, which causes some complications, but over all the downside of the housing market is a sign of a good and healthy market.

But make no mistakes property values will go up again, and when they do, make sure you are owning property, not just looking at it. Next time I'll talk about how thye Salt Lake valley is gearing up for it's largest real estate growth in history.

Keith

"Nothing gives one person so much advantage over another as to remain always cool and unruffled under all circumstances."

* Thomas Jefferson (1743-1826)

Yesterday I wrote briefly about inventory and that it also was a major contributor to the downturn today I'm going to talk about the role that speculative building took in increasing our inventory.

With the advent of the Spec Home, as I call it people started to see some really great things happen. somebody could build a home for $240,000 and see a 7-10% increase over the 7-12 months it took to build the property so with a $5,000 deposit folks could make back between 17-22,000 dollars in just a year. That amount is an amount that can change most peoples lives. But people started getting a little greedy, there's an old saying that "pigs get fed, hogs get slaughtered"

Certain folks in the industry started using good math to "sell" people on these spec homes, essentially they said if you can make 7-10% on a $240,000 home, you can make that same amount on a $500,000 home, so with the same deposit you could make as much as $50,000. This was more than a lot of folks made in a year at their full time jobs, and with the easy financing we started to see a deluge of luxury homes being built, some people I have helped were building 2-4 houses at once which only adds to inventory.

This was happening all over the country, but here in Utah specifically it was happening in Herriman, Draper (Suncrest), Lehi, and Saratoga Springs. As well as many other places across the state.

What this ended up giving us was a glut of luxury homes and not enough "bread and butter" houses (which drove the price of the bread and butter houses up even more, but that's for another blog post) and when the market shifted and lenders started tightening their guidelines there was nobody left to buy these luxury homes, I have a saying myself and that is " A $500,000 house isn't worth anything if there's nobody there to buy it." which is what we ended up with a huge number of beautiful new luxury homes that now would not sell for what was owed on them.

But it could have been worse, and this is why I believe the Utah market is going to be okay. When the "hot markets" nationwide started to fail, many of the large builders here decided that it was better to stay in business over the long term, rather than just stay in business for short term profitability. So some of the better known builders started requiring prospective homeowners to sign a 1 or 2 year occupancy agreement before the would build a home, this cut down the number of new builds significantly, but kept our inventory at much lower levels, even going into this particular downturn.

Next Time...Why this downturn is a good thing, for everybody, and what we can do to help keep our local housing market ahead of the game.

Keith

"That's the key to having it all: stop expecting it to look like what you thought it was going to look like"

-Cindy Chupack

There is increased speculation over the fate of Home Prices, will they go up, will they go down, will they stay the same? Economists have started playing a game of he said/she said, some saying that the bottom will occur sometime next year, and others saying that 2012 will be the bottom.

I'm with the 2009 people, especially here in Utah, we were able to avoid a lot of the negative impact of the housing bubble because many of our large builders finally saw the "big picture" and changed certain business practices before things got too out of hand.

In the news all we hear is endless talk of Sub Prime mortgages and the impact that they had on the market, very rarely do we hear about the other major cause of the downturn, inventory.

Now both of these causes are closely connected, but since the news media has beaten the sub prime mess into the ground I'm going to talk about inventory, which isn't quite as sexy, but completely relevant nonetheless.

During the boom everybody was able to get financing for anything, and a lot of people, seeing this opportunity chose to build their dream home. And something strange happened, they saw that from the time they signed the purchase contract to the time they bought the home that the value had gone up significantly! And suddenly company after company started springing up claiming that people could make 50,000 dollars with 5,000 dollars and good credit, and a huge industry of speculative building popped up. Builders were busier than ever and the homes were selling, and increasing in value, and people were making a lot of money. It seemed like a golden goose that would never give up it's eggs.

Tomorrow I'll go into how good math and irresponsible behavior ultimately caused housing inventory to skyrocket, and how a good portion of that was in luxury homes, and why.

Good Morning. I have seen a certain trend developing in our industry which some would consider disturbing, I myself see it as a sign of opportunity. There's an old saying in the investment world which goes something like this, "when everybody else is getting out, get in. And when everybody else is getting in, get out." This concept does not just apply to stocks and other investments, it is usually a signal of the greatest opportunity. For example, if you had bought stock in Chrysler in 1979 most people would have called you crazy, but you would have been crazy all the way to the bank after Lee Iacoca turned the company around. But buying stock in Chrysler in 1992 when consumer confidence was up, would have just put you in a miserable state today.

The same is true with any opportunity, we are seeing Real Estate Agents leaving the business in record numbers, and I am as aware as anyone that it's more difficult now than it was 2 years ago, but as you see the Realtors in your area dwindle, you must take advantage of the new opportunity, with everyone "getting out" of the business now is the time to learn and apply new skills that allow you to prosper, or even just get by during this down cycle. It's the skills and relationships that you develop now that will be the key to exploding your business when things start to look a little better, It's time to really "get in the game" it will take some time and some effort, but at the end of the day NOW IS THE TIME to get your business running right, NOW is the time to grow your SOI database, NOW is the time to stay in touch with past clients, NOW is the time to increase your pipeline.

We all know it's a numbers game, for every 10-20-30 or 100 people in your database you should know how many transactions will come from it, and then grow your database accordingly. When the cycle trends back up you may go from 2 transactions per 100 people to 2 transactions per 20 and that is where your business will really explode, and we know that the best people to keep in our database are satisfied clients, because if a client is happy with you over 2 transactions, there's a good chance they will be happy doing 3, 4, or 5 transactions with you in the future, and after the second transaction the odds of getting great referrals goes up exponentially.

This requires that we provide a higher level of service to our clients, but if you are not willing to "go the extra mile" whether it's through systems, teams, or just plain old work, this may be the very reason you may be struggling.

Think about it.

Keith

"I came to realize that life lived to help others is the only one that matters and that it is my duty...This is my highest and best use as a human."

-Ben Stein