Ah-Ha for Realtors and others in the industry.
According to NAR, the method of home purchase through a real estate agent was 77% in 2009, down from 81% in 2008. Other methods also down in 2009 from 2008 are 1) buying directly from builder or builder’s agent at 8% down from 10% and 2) directly from the previous owner at 5% down from 6%.
But with those three options down, what method of home purchase option had an increase?
Through a foreclosure or trustee sale at 10% up from 3% in 2008 and previously only 1%, or less, from 2001-2007! That’s HUUUUGE! My estimate for 2010…similar results.
What does this mean? Buyer’s are looking for deals and going OUTSIDE of the MLS.
What does this means to us? How do we adapt to and participate in this change of method?
One option: Tap into this pipeline. Network and create relationships with those who purchase foreclosures at the trustee sales (terms may vary depending upon your state). There are many companies out there that purchase foreclosures everyday for resale and add a marginal markup to unload it quickly. They have mailing lists and websites for you to subscribe to. These companies will also help you and your client purchase a specific home directly from the sale. Purchasing these homes must be done with cash…or some companies that purchase for you have hard money loan options available for a short term. Your client can then go through financing the traditional route.
Of course you or your client can purchase a home directly from the sale, but it may be worth it to pay a small markup for their expertise, service and their existing weight at these sales.
TOP 2 TIPS:
1. When utilizing this process, be sure to establish how you are going to get paid. Since this is a foreclosure, the seller does not pay. You will need to have the buyer pay you for your services.
2. Do your homework! There is a lot to learn about foreclosures and trustee sales, i.e. verifying if the home is occupied, there is no inspection period, completing a title search, what are the hard money loan terms, finding an honest and good foreclosure company to work with, etc.
I personally have worked with Randy Lewis at RE/Max and www.azfixup.com. If you contact him, tell him I sent you.
As a highly motivated, experienced and professional REALTOR, please consider using me in your next real esate transaction. I only refer to Randy as a specialist in trustee sales.
Have other options you would like to add? Please feel free to add/discuss this, or any other Ah-Ha topic, at anytime.
