Make A Shortlist

A shortlist provides you with a way to track your search progress when looking for foreclosures and pursuing hot leads . When you have a shortlist, you actually ensure that you only follow those homes which meet your particular buying requirements and anything that falls short of those requirements can be easily discarded since they could only clutter your search. These criteria helps you define the parameters within which you can ensure the quality of properties that you buy. This is crucial especially when dealing with highly desirable properties that many investors are interested in.

Making a shortlist actually involves more than trimming down your list of properties that you feel deserves more attention than the others. It also involves some level of organization based on the criteria you have earlier set. When you have an organized shortlist, it is easier to identify which properties are of high priority and which ones can be dealt with later. It could also help you boost your real estate network which will ultimately benefit your investment.

Perform a Property Inspection

A property inspection is a must since all bank foreclosed homes are sold as they are, which means that if you buy them, you will have to accept them regardless of the state that they are in. Inspecting the property on your own will allow you to determine for yourself whether you can handle the repairs or not. Remember that foreclosures are the result of the previous owners’ default in their mortgage payment and that they could have neglected to perform needed maintenance works on the property due to financial difficulties.

Convey Your Interest To The Bank

Once you have made a choice, you can contact the bank and make an offer for the property. To do this, you must keep in touch with the bank’s REO department that handles their foreclosures transactions.

Keep in mind that when you submit your paperwork to the bank for any bank foreclosed homes, it is important that all details are complete and that you have rechecked all the attachments and documents. If you have a preapproved loan, make sure the bank is given a copy of the preapproval letter. Incomplete paperwork can unduly hamper your transactions and cause you unnecessary frustrations.

According to census officials, they expect that many of their mailed census forms would not be returned by households who have abandoned their foreclosed homes and by immigrants who have concerns about their immigration status. Officials also added that sending personnel to make personal follow-ups on unreturned mailed census forms is expensive.

In March, the Census Bureau will send census forms to around 120 million households who are expected to receive them between March 15 and 17. Households who do not return the forms will receive a reminder or follow-up communication through a postcard. Those who do not respond after follow-ups will be visited by census takers in May.

This month, Census chief Robert Groves will launch the nationwide campaign for the census in New York City through an event where he will unveil a 48-foot trailer with the label Mail It Back. Thirteen trailers will attend around 800 small and big community events across the country to promote the census, including the NCAA Final games and the Super Bowl.

Despite expected problems arising from REO bank foreclosures, the Census Bureau hopes that the emphasis of the campaign on the confidentiality of the information given on the census forms will encourage everyone to participate, regardless of immigration or mortgage account status.

According to the U.S. Constitution, any information gathered through the census cannot be disclosed to any other federal agency or law enforcement body. Census responses are considered confidential under the law. Additionally, the Constitution mandates the Census Bureau to count everyone in U.S. households, regardless of their citizenship or immigration status.

During the last census in 2000, around 67 percent returned their census forms, a significant improvement over previous census years. The once-every-decade head count is mandated by the Constitution so that congressional districts are properly drawn and that electoral college votes are properly distributed to the states. Additionally, Congress uses the head count in distributing billions in federal funds to state and local governments and other political units.

Census data is also used to determine where hospitals and schools should be built and how disaster management efforts are implemented.

According to Groves, his bureau has been doing its best to address anticipated problems like REO bank foreclosures and undercounting in minority and immigrant communities.

The total value of all assessed properties in Worcester decreased to $12.1 billion in January 2009, marking a drop of almost 10 percent or a $1.2 billion reduction compared to the total property value of $10.9 billion in January 2008.

The peak for assessed property values in Worcester occurred in January 2007 when the total property value was $12.76 billion. This means that total property value in the city fell by $1.8 billion within two years.

The substantial drop in property values in January 2009 was more than twice the rate of reduction in January
2008, when values fell by 4.6 percent. The drop this January also marked the sharpest decrease since 1993, when total property value fell by $875 million.

William Ford, assessor for the city of Worcester, said that the sharp drop in property values was largely caused by difficulties in the local property market, which is riddled with REO bank foreclosures. In the July-September quarter, foreclosure postings in Worcester increased by almost 24 percent from the April-June quarter and by more than 21 percent from the July-September period in 2008.

Ford explained that property values for taxation this year was set as of January 1 this year, based on property valuation data in 2008, creating an assessment lag of one year. Ford said that the assessment period was set by Massachusetts law, so his office needs to comply with state law despite significant changes in property values throughout 2009.

Taxpayers may wonder about higher real estate tax assessments at a time of falling property prices, but Massachusetts law, just like laws in many other states, set property values at the start of the year as the basis for property taxes for the whole year.

According to the city assessor, the average valuation for commercial properties increased slightly from $598,898 in 2008 to $599,392 this year. The average valuation for industrial properties however dropped by 3.5 percent to $701,810. Commercial and industrial properties this year accounted for 21.3 percent of total property valuation while residential properties comprised nearly 79 percent of overall property valuation.

Ford said that because of the lower prices of REO bank foreclosures, the average valuation for a single-family house has dropped by 12 percent to $206,517.

Experts said that first-time homebuyers and investors are lured to the housing market by low home prices and interest rates and tax incentives. They attributed the low home prices to an abundance of foreclosed properties available on the market. In Phoenix, Arizona, the median home price was $68,000 by the end of February.

However, Arizona State University’s Real Estate Center director Jay Butler cautioned homebuyers about venturing into foreclosure real estate as the market is froth with risks that may cause them to lose their investment.

According to Arizona Regional Multiple Listing Service Chief Executive Officer Bob Bemis, two-thirds of houses for sale are bank owned foreclosures.

This information is supported by Realty Executives real estate agent Brett Barry who said that foreclosed properties and short sales, homes that are placed on the market valued less than the total mortgage the homeowner owes to his lender, accounted for more than half of listings. He added that the increasing number of REO properties is creating an unpredictable climate in the housing market.

Barry advised potential homebuyers to always arrange their finances before closing a sale to have a leverage when negotiating with homeowners. Experts recommended getting into the purchasing game with cash in hand or a prequalified loan.

Most banks will require potential homebuyers to fill out applications for loans. And banks may reduce closing costs for homebuyers who will take out loans through them.

Barry pointed out the competition for heavily discounted bank owned foreclosures properties that giving earnest money will be an advantage for potential homebuyers. He claimed that earnest money will only reinforce the sincerity and interest of the homebuyer to make a purchase.

Meanwhile, Sun American Mortgage Co. senior loan officer Reg Gustin said that not all bank owned homes are worth the price that homebuyers paid as they find out too late that they have to shell out big amount of money to make the houses livable. He said that the Federal Housing Administration’s 203K loan program includes funds for home refurbishing and most homebuyers find appealing the $346,250 loan cap and 3.5 percent down payment. However, he pointed out that the total loan amount should include the repair costs for bank owned foreclosures.

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