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You are currently browsing the RealEstateAuctions.com blog archives for the day Thursday, January 14th, 2010.

 

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  • For AvalonBay, Long Island Filled With Risk, Reward July 29, 2010
    The region near New York City is one of the nation's toughest markets to development properties. AvalonBay is undeterred. […]
  • Miami Tower Built for Storms July 28, 2010
    A Miami-based developer is seeking to capitalize on predictions of a rougher hurricane season, which may be a marketing opportunity for him and his new tower at 1450 Brickell Ave. […]
  • Office Developers Revive Plans July 28, 2010
    With Europe's financial sector showing signs of stabilizing, developers have begun to dust off plans. A development boom, however, isn't likely anytime soon. […]
  • It's a Low Point for High Point July 28, 2010
    Vornado Realty Trust is opting to forfeit a 2 million-square-foot furniture mart in High Point, N.C., to holders of its $191 million securitized mortgage. […]

Archive for January 14th, 2010

REO Properties

Thursday, January 14, 2010 @ 04:01 PM Author: Tim

The challenges facing the real estate market in the last few years have brought to the forefront a term that many have never heard of, REO properties.  REO stands for Real Estate Owned and most times is property taken back by a bank or mortgage company when they could not sell it at the foreclosure auction.  Most foreclosure auctions do not result in any sort of bid because if there was enough equity in the property the owner would have probably sold the property and paid off the bank or mortgage company.  Most foreclosure sales begin with a minimum bid that will include the loan balance, accrued interest, attorney’s fees and any other costs associated with the foreclosure process.  Since what is owed the bank or mortgage company almost always exceeds what the property is worth, foreclosure auctions normally do not result in a successful sale which means the property reverts back to the bank or mortgage company which then becomes an REO, real estate owned property.

A bank REO property may or may not be a good deal.  Many people think that by buying these properties they are getting a great deal and making a killing in the market.  That sometimes is true but most often not.    These are things to think about before an offer is made. You should always ask, are there any inspection reports, what work has the bank agreed to, how long will it take for the bank to accept the offer and are there any special forms that will be needed to complete the sale.  Bank owned properties are almost always sold “as is” meaning there may be repairs needed or other liens on the property which will need to be satisfied before clean title will be conveyed.  It may sound like the bank is just dumping these properties but they may be of assistance with handling an eviction, do some repairs, pay off homeowner’s association fees and negotiate with the IRS to remove any tax liens.

It is a lot of work but there are advantages to purchasing REO properties over foreclosed properties.  Once a property becomes an REO property all the liens are removed and taxes are paid in full.  REOs are normally listed with real estate agents and inspections are allowed prior to contract which means the property is typically restored to a salable condition.  An additional benefit with REO properties is that the bank or mortgage company will many times offer better financing than they might offer for traditional properties.  Lenders and mortgage companies do not want to hold on to these properties very long because of the cost to maintain so if you do your homework and are willing to take a risk it just might be your entry into the homeowner market.

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What Happens on Auction Day

Thursday, January 14, 2010 @ 02:01 PM Author: Anthony

Consumers are naturally curious about what happens on auction day.

It’s a busy and fun-filled time, to be sure. The staff of RealEstateAuctions.com has prepared for weeks to make this event worthwhile and beneficial for buyers and sellers.

Participants are required to arrive at least 30 minutes prior to the start of the event to register and pick up all necessary materials. A full hour in advance is really the best bet, as most people typically cut things very close time-wise. That’s human nature, it seems!

Upon arrival, buyers will produce (but not surrender) the certified check they have brought for each property theay are interested in bidding on. Registration staff will also ask for a government-issued photo ID, such as driver’s license, passport, etc., as proof of identity.  Buyers  receive a copy of the auction Terms & Conditions along with a numbered card, or paddle, that they will hold aloft when making a bid at auction.  Buyers will also receive a printed brochure or pamphlet with basic information about each property for sale that day, including photos, adresses and prices.

Sellers also check in with staff at the entrance to the auction room.  Sellers will be shown to a designated area in the auction room where they can be positioned to be in contact with the  and a RealEstateAuctions.com facilitator as they event progresses.

Spectators  are welcome to attend to experience what happens on auction day. We require spectators to  check in and register with staff outside the auction room. Spectators can take a printed brochure or pamphlet to follow along with the action, too. Attending a real estate auction as a spectator is a great way to learn about the process and see if it’s something you’d like to take part in. 

An event facilitator welcomes the crowd and reviews the basic ground rules of the day. The event kicks off in earnest when pictures of the first property appear on the screen and the auctioneer takes off into his signature chant.

Auction properties will vary in their popularity. Some properties receive a high amount of bidding, some less. Bidders raise their paddles to indicate their bid as the action skips back qand forth across the room, always under the watchful eye of the auctioneer at the podium and his bid assistants stationed in the crowd.

Absolute auctions are the most exciting. Properties sold “absolute” means the highest bid wins. Sellers are sometimes reluctant to offer their properties in the absolute category, fearing the bidding might not be high enough. Often, the opposite happens because bidders in an absolute auction know that if they go just go a little higher in price, the property could be theirs.

Once a winner is declared,  a friendly associate with RealEstateAuctions.com shows the way to the contract administration area where paperwork begins for the purchase of the property, concluding what happens on auction day.

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Auction Financing

Thursday, January 14, 2010 @ 11:01 AM Author: Anthony

Potential bidders in a real estate auction must be qualified financially in order to participate. At RealEstateAuctions.com,  we’ve got an auction financing resource that is literally on the map, nationally.

Bank of America is our preferred lending partner and we couldn’t be more proud.

Bank of America is the largest bank holding company in the United States, by assets.  The company operates in every state plus the District of Columbia.

What it means for the consumer is unequaled access to the best financing products available.

Because of the accelerated transaction process that typifies a real estate auction, buyers must come prepared to close. The seller promises clear title at closing, ample inspection opportunities and a price he or she will accept that’s often considerably reduced from a previous listing price. Therefore, bidders must be prepared to close.

This means that auctions are not a place for tire-kicking. Bidders must have cash or financing in place to close within 30-45 days.  Winning a property at auction, then starting the  real estate financing process, is not the recipe for success. Auction contracts provide for no financing contingencies, no closing date push-backs because of a lack of financing. Bidders unable to close on the specified date risk their earnest money and possibly even more. Sellers may seek additional compensation beyond earnest money from buyers unable or unwilling to close beyond.

With auction financing such a critical component, there’s really no better choice than RealEstateAuction.com’s preferred lender, Bank of America.

What distinguishes our relationship with Bank of America is not only the programs and rates available, but the people. Thomas Faille is Bank of America’s Number One Professional Mortgage Counsultant. That’s correct, he’s Number One in the entire Bank of America operation nationwide. He and his team are regular visitors to the offices of RealEstateAuctions.com, educating our auction specialist Realtors about the newest loan options. And of course, Tom and his associates also meet with our clients interested in financing for auction and non-auction real estate. You can’t beat that kind of personal service from the best in the business.

Be sure to have your financing in order before registering to bid at a real estate auction. We’d be pleased if you’d consider our preferred lender, Bank of America, but off course you’re free to select any lender of your choosing. You’d certainly be wise to compare programs from different lenders, however. It’s always important to get a second and even third opinion on important financial undertakings like auction financing.

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