5 Tips For Buying a Foreclosed Home
After
turning on the T.V. this week I felt like grabbing all my money and
heading for the hills. But when the dusts settles a little bit and the
panic recedes, there is going to be a ton of opportunity. And a
perfect example is REOs or Bank Owned Homes. As you can see in an article recent article on defaults in Utah, bank owned homes are expected to rise soon here in Utah. So here are 5 tips to help you make the best of the market.
1) Know Your Seller
Banks
tend to become habitual in the way they sell homes. With a savvy agent
you can research the seller and see some trends. Does this seller
always do 30 day price reductions? If the answer is yes, then maybe
you want to wait a few more days until the next price reduction before
you put in an offer.
2) Sell Your Home
Banks
are not going to want to wait around while you sell your home. They
are losing money every day they have the home on their books because of
costs associated with "carrying" the home or carry costs. These costs
can be quite high and they include things like maintaining the
property, paying attorneys, and paying interest on money owed. The
main reason they will let the property go at a discount is so they can
avoid these fees. This purpose is defeated if they have to wait around
for you to sell your home.
3) Get To Know a Contractor
It
is highly likely that your home is going to need some work. The bank
likely did some minimal repairs to put the home on the market but it
may take more to make it livable. Remember that this home was
foreclosed on and the last people to live there were probably not too
happy on their way out. Anticipate doing at least some minor repairs
like new carpet and paint
3) Don't Forget to Negotiate
Just
because they are a bank owned home does not mean that the banks will
not negotiate. They are a seller just like any other. And sometimes
they are more motivated than most sellers. In fact, many markets in
the U.S. are currently "REO Driven" where REOS are the ones selling and
are the price setters. So don't hesitate to throw in a low ball
offer. Just don't make it so low that you end up wasting everyone's
time.
4) Make it a Clean Offer
The
cleaner the offer the better. You can still do an inspection and have
the property contingent on financing, but be careful to add too many
contingencies. Also, offer at least 1% of the purchase price for
earnest money and be flexible on settlement dates.
5) Get Set Up With a Just Listed Auto Email
Since many of these properties are going to sell quick, you want to be the first to know about them. Click here and
indicate that you are looking for foreclosures and the area you are
interested in. then you will get homes emailed to you the day they
come on the market.
September 2008 Inventory Levels
Home inventory levels are figured out by taking the number of homes on the market in a given zip code and dividing it by the number of homes sold in that zip code for the last 30 days. The answer will give you the absorption rate. Or the number of months it would take to sell the existing inventory at the current rate if no other homes came on the market.
Note: I do not include properties under contract in the calculation. And I round up for .5 and above.
Sellers Market 1-6 Months
Normal Market 6-8 Months
Buyer’s Market 8+ Months
|
City |
Zip |
July, 2007 |
May 28, 2008 |
July, 2008 |
August 2008 |
September 2008 |
|
Draper |
84020 |
10 |
14 |
14 |
13 |
14 |
|
Midvale |
84047 |
3 |
7 |
8 |
9 |
10 |
|
Riverton |
84065 |
8 |
14 |
12 |
14 |
13 |
|
Sandy |
84070 |
4 |
10 |
9 |
11 |
6 |
|
West Jordan |
84088 |
8 |
9 |
9 |
10 |
8 |
|
Sandy |
84092 |
7 |
15 |
13 |
17 |
21 |
|
Sandy |
84093 |
15 |
11 |
18 |
25 |
11 |
|
Sandy |
84094 |
3 |
10 |
7 |
9 |
5 |
|
South Jordan |
84095 |
9 |
13 |
16 |
14 |
11 |
|
Salt Lake City |
84101 |
11 |
46 |
36 |
9 |
24 |
|
Salt Lake City |
84102 |
4 |
6 |
10 |
6 |
14 |
|
Salt Lake City/Aves |
84103 |
7 |
15 |
16 |
9 |
12 |
|
Salt Lake City |
84104 |
3 |
6 |
8 |
6 |
5 |
|
Salt Lake City |
84105 |
6 |
5 |
8 |
6 |
7 |
|
Salt Lake City |
84106 |
8 |
7 |
9 |
10 |
6 |
|
Murray |
84107 |
4 |
7 |
9 |
7 |
9 |
|
Salt Lake City |
84108 |
6 |
12 |
9 |
8 |
11 |
|
Salt Lake City |
84109 |
6 |
18 |
19 |
9 |
12 |
|
Salt Lake City |
84111 |
7 |
8 |
9 |
12 |
14 |
|
South Salt Lake |
84115 |
4 |
14 |
12 |
9 |
9 |
|
Salt Lake City |
84116 |
2 |
8 |
8 |
8 |
8 |
|
Holladay |
84117 |
5 |
10 |
23 |
11 |
13 |
|
Taylorsville/Kearns |
84118 |
3 |
6 |
8 |
8 |
8 |
|
West Valley City |
84120 |
3 |
6 |
10 |
12 |
8 |
|
Cottonwood |
84121 |
13 |
11 |
10 |
13 |
13 |
|
Taylorsville/Murray |
84123 |
3 |
4 |
6 |
8 |
7 |
|
Holladay |
84124 |
6 |
7 |
9 |
13 |
9
|
All data taken from the WFRMLS. Information reliable but not guaranteed. All rights reserved Mark Alder ©, A Salt Lake City REO Real Estate Agent cell (801) 979 6275
Notice of defaults (when a homeowner does not make mortgage payments for 90 days) were way up in Utah for the months of July and August. This is likely a sign of a surge of foreclosed homes to soon hit the Salt Lake market. As these properties work there way through the system, many will eventually get foreclosed on. When that happens, the bank will be forced to sell them on the open market as a bank owned home or an REO (Real Estate Owned).
Because of the foreclosure time line, you can expect to see many of these homes in default to hit the market sometime after the new year. And while this is not great news for many neighborhoods, many home buyers can take advantage of these REOs which are often sold at a discount so the bank can get them off their books. If you would like these homes emailed to you the day they come on the market, sign up here and indicate the neighborhood you are interested in. Be sure to indicate you are looking for foreclosed homes.
|
Month |
Notice of Defaults |
Notice of Trustees Sale |
REOs |
Total |
|
February 2008 |
200 |
955 |
133 |
1288 |
|
March 2008 |
161 |
946 |
123 |
1230 |
|
April 2008 |
244 |
926 |
178 |
1348 |
|
May 2008 |
95 |
938 |
328 |
1361 |
|
June 2008 |
243 |
1030 |
228 |
1501 |
|
July 2008 |
892 |
687 |
332 |
1911 |
|
August 2008 |
486 |
779 |
326 |
1611 |
Utah Notice Of Defaults
All data taken from the WFRMLS. Information reliable but not guaranteed. All rights reserved Mark Alder ©, A Salt Lake City REO Real Estate Agent cell (801) 979 6275
The Utah Safety Council provides some very helpful
information on their website for anyone who is thinking of buying a home and is
concerned about radon. Radon is a gas
released from uranium that is most often found in the soil and seeps into the
home. The radon gas can get trapped in
the basement of the home and can be dangerous for those who live there. If you are thinking of buying a home, you may
want to do a Radon test when you do your regular inspection.
The following chart is taken from the Utah Safety Council’s
website and it provides information about each zip in Salt Lake
and the result of short term tests. A
short term test is one that takes less than 90 days to complete. Anything over 4pCi/L is considered
unhealthy. For more information please
visit the Utah Safety Council’s website and the EPA’s website .
Salt Lake County
|
Zip |
< 4 pCi/L |
4-10 pCi/L |
10-20 pCi/L |
> 20 pCi/L |
Maximum |
Average |
Total Tests |
|
84006 |
2 |
4 |
1 |
2 |
28.9 |
10.5 |
9 |
|
84020 |
117 |
27 |
2 |
1 |
20.7 |
2.8 |
147 |
|
84044 |
27 |
12 |
0 |
0 |
8.7 |
2.8 |
39 |
|
84047 |
60 |
20 |
2 |
0 |
12.9 |
3.4 |
82 |
|
84065 |
45 |
41 |
12 |
3 |
34.4 |
6.1 |
101 |
|
84070 |
111 |
20 |
3 |
0 |
10.6 |
2.5 |
134 |
|
84084 |
96 |
39 |
2 |
3 |
40.0 |
3.5 |
140 |
|
84088 |
66 |
50 |
9 |
1 |
24.7 |
4.6 |
126 |
|
84090 |
3 |
0 |
0 |
0 |
2.3 |
2.0 |
3 |
|
84091 |
2 |
0 |
0 |
0 |
0.5 |
0.5 |
2 |
|
84092 |
288 |
150 |
45 |
32 |
152.0 |
6.0 |
515 |
|
84093 |
198 |
173 |
104 |
40 |
78.2 |
8.3 |
515 |
|
84094 |
103 |
36 |
8 |
2 |
24.8 |
3.9 |
149 |
|
84095 |
91 |
31 |
8 |
2 |
30.3 |
4.2 |
132 |
|
84096 |
20 |
6 |
5 |
1 |
27.0 |
5.2 |
32 |
|
84101 |
7 |
1 |
0 |
0 |
5.0 |
1.1 |
8 |
|
84102 |
58 |
30 |
3 |
0 |
10.8 |
3.0 |
91 |
|
84103 |
136 |
13 |
3 |
0 |
14.1 |
2.2 |
152 |
|
84104 |
27 |
14 |
4 |
0 |
18.3 |
4.1 |
45 |
|
84105 |
140 |
61 |
10 |
0 |
15.0 |
3.5 |
211 |
|
84106 |
187 |
75 |
15 |
1 |
24.7 |
3.7 |
278 |
|
84107 |
89 |
15 |
3 |
1 |
28.1 |
2.8 |
108 |
|
84108 |
161 |
15 |
1 |
0 |
10.1 |
1.9 |
177 |
|
84109 |
216 |
82 |
10 |
1 |
20.5 |
3.4 |
309 |
|
84110 |
7 |
1 |
0 |
0 |
5.2 |
2.5 |
8 |
|
84111 |
21 |
6 |
1 |
0 |
11.7 |
2.6 |
28 |
|
84114 |
0 |
2 |
0 |
0 |
8.6 |
7.9 |
2 |
|
84115 |
33 |
7 |
0 |
0 |
8.7 |
2.2 |
40 |
|
84116 |
60 |
6 |
2 |
1 |
22.6 |
2.4 |
69 |
|
84117 |
135 |
34 |
7 |
0 |
18.1 |
3.1 |
176 |
|
84118 |
115 |
11 |
3 |
1 |
28.4 |
2.3 |
130 |
|
84119 |
34 |
20 |
2 |
0 |
13.9 |
3.7 |
56 |
|
84120 |
49 |
29 |
4 |
0 |
10.8 |
3.9 |
82 |
|
84121 |
300 |
97 |
17 |
10 |
50.0 |
3.8 |
424 |
|
84122 |
1 |
0 |
0 |
0 |
3.0 |
3.0 |
1 |
|
84123 |
98 |
16 |
6 |
0 |
10.5 |
2.4 |
120 |
|
84124 |
173 |
76 |
20 |
0 |
19.1 |
3.8 |
269 |
|
84126 |
0 |
1 |
0 |
0 |
4.3 |
4.3 |
1 |
|
84128 |
23 |
5 |
0 |
3 |
22.7 |
4.2 |
31 |
|
84138 |
1 |
0 |
0 |
0 |
1.4 |
1.4 |
1 |
|
84147 |
1 |
0 |
0 |
0 |
0.9 |
0.9 |
1 |
|
84151 |
0 |
1 |
0 |
0 |
4.1 |
4.1 |
1 |
|
84152 |
2 |
0 |
0 |
0 |
1.9 |
1.1 |
2 |
|
84157 |
1 |
0 |
0 |
0 |
1.2 |
1.2 |
1 |
|
84158 |
6 |
0 |
0 |
0 |
1.4 |
1.3 |
6 |
|
84165 |
1 |
0 |
0 |
0 |
3.7 |
3.7 |
1 |
|
84170 |
1 |
0 |
0 |
0 |
0.5 |
0.5 |
1 |
|
84171 |
1 |
0 |
0 |
0 |
1.9 |
1.9 |
1 |
|
Salt Lake |
3313 |
1227 |
312 |
105 |
152.0 |
4.2 |
4957 |
|
|
Home inventory levels are figured out by taking the number of homes on the market in a given zip code and dividing it by the number of homes sold in that zip code for the last 30 days. The answer will give you the absorption rate. Or the number of months it would take to sell the existing inventory at the current rate if no other homes came on the market.
Note: I do not include properties under contract in the calculation. And I round up for .5 and above.
Sellers Market 1-6 Months
Normal Market 6-8 Months
Buyer’s Market 8+ Months
|
City |
Zip |
July, 2007 |
May 28, 2008 |
July, 2008 |
August 2008 |
|
Draper |
84020 |
10 |
14 |
14 |
13 |
|
Midvale |
84047 |
3 |
7 |
8 |
9 |
|
Riverton |
84065 |
8 |
14 |
12 |
14 |
|
Sandy |
84070 |
4 |
10 |
9 |
11 |
|
West Jordan |
84088 |
8 |
9 |
9 |
10 |
|
Sandy |
84092 |
7 |
15 |
13 |
17 |
|
Sandy |
84093 |
15 |
11 |
18 |
25 |
|
Sandy |
84094 |
3 |
10 |
7 |
9 |
|
South Jordan |
84095 |
9 |
13 |
16 |
14 |
|
Salt Lake City |
84101 |
11 |
46 |
36 |
9 |
|
Salt Lake City |
84102 |
4 |
6 |
10 |
6 |
|
Salt Lake City/Aves |
84103 |
7 |
15 |
16 |
9 |
|
Salt Lake City |
84104 |
3 |
6 |
8 |
6 |
|
Salt Lake City |
84105 |
6 |
5 |
8 |
6 |
|
Salt Lake City |
84106 |
8 |
7 |
9 |
10 |
|
Murray |
84107 |
4 |
7 |
9 |
7 |
|
Salt Lake City |
84108 |
6 |
12 |
9 |
8 |
|
Salt Lake City |
84109 |
6 |
18 |
19 |
9 |
|
Salt Lake City |
84111 |
7 |
8 |
9 |
12 |
|
South Salt Lake |
84115 |
4 |
14 |
12 |
9 |
|
Salt Lake City |
84116 |
2 |
8 |
8 |
8 |
|
Holladay |
84117 |
5 |
10 |
23 |
11 |
|
Taylorsville/Kearns |
84118 |
3 |
6 |
8 |
8 |
|
West Valley City |
84120 |
3 |
6 |
10 |
12 |
|
Cottonwood |
84121 |
13 |
11 |
10 |
13 |
|
Taylorsville/Murray |
84123 |
3 |
4 |
6 |
8 |
|
Holladay |
84124 |
6 |
7 |
9 |
13 |
All data taken from the WFRMLS. Information not guaranteed. All rights reserved Mark Alder ©, a Salt Lake City Real Estate Agent cell (801) 979 6275
Lead in real estate by providing better information to my clients allowing them to enhance their lives with bold decisions. Just listed properties emailed to you by visiting SoldonSaltLake.com.
I Love This City! My favorite part of the job is showing people around this wonderful place and helping them find the home they love.
I grew up in Salt Lake City and attended the University of Utah. I graduated in 2001 with a B.A. in English. After graduating, I took my enthusiasm for travel and adventure overseas to Jiujiang, China where I was a English teacher at a University. Just before getting into Real Estate full time, I lived in San Diego and attended California Western Law School.
I have been skiing since age 5 and this continues to be one of my favorite things to do. I have worked at the ski resorts and even spent one winter as a Snowmaker at a local resort. I also love to mountain bike. I like to ride all over the Wasatch Mountains and in Moab. The Park City Trail System and the Wasatch Crest are some of my favorite rides.
I have written a ton of articles on buying and selling homes with an emphasis on foreclosures. I also keep my website up to date with Salt Lake City real estate market info. You can see my SoldonSaltLake website here.
Awards and Recognition
I have extensive foreclosure experience and know the ins and outs of buying short sales, REOs, and auction properties. I also help the first time homebuyer and the move up buyer. If you want homes or foreclosures emailed to you the day they come on the market then fill out this form.
Mark,
I wanted to let you know how much I appreciated your help. Because I relocated from out of state, I had to trust your judgment of the Salt Lake City area and I was not disappointed! The location and neighborhood is exactly what I wanted. I also commend you for your patience. I am the type of person who likes to be involved in every detail and you were fantastic at keeping me informed during each step of the home buying process. Thank you,
Emily Lucht
Dear Mark,
Garret & I want to thank you for all your help & time in both selling and purchasing our homes. thank you for making the effort to find a home that fit our needs so well. We love our home & neighborhood. It meets our needs perfectly. Your calm, reassuring nature made, what can be a stressful experience, pleasant and easy. Your professional, kind, thoughtful, and patient way meant a lot to us.
Sincerely,
Brooke & Garrett
Dear Mark,
Just a quick note to let you know that Jon and I couldn't be happier with the home you found for us. When I gave you my specifications and expectations, I didn't think it would be possible to find the exact house we wanted in the market in which we were looking. You turned those expectations around. I had worked with other realtors and did not experienced the type of attention you showed to us. Through your dedication, not only did you find the perfect home for us, you made sure that we were happy with the decision - down to the last detail. In short, you found our dream home and we couldn't be happier.
Kelly Williams
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