rvas1011 Posted October 11, 2007 Share Posted October 11, 2007 ok, so i'm sure everyone has seen that there are A LOT of foreclosures, especially in Houston. I went to visit a friend of mine and in their neighborhood i saw two homes with signs that state the house will be up for auction.With all these foreclousures one would think right now is a great time to buy, but then i heard that it's not.i'm confused. if i want to buy a house that is selling for less than what it's worth, wouldn't that be beneficial for me??? i don't quite understand the market so any advice/tips would be appreciated.... Quote Link to comment Share on other sites More sharing options...
flipper Posted October 11, 2007 Share Posted October 11, 2007 ok, so i'm sure everyone has seen that there are A LOT of foreclosures, especially in Houston. I went to visit a friend of mine and in their neighborhood i saw two homes with signs that state the house will be up for auction.With all these foreclousures one would think right now is a great time to buy, but then i heard that it's not.i'm confused. if i want to buy a house that is selling for less than what it's worth, wouldn't that be beneficial for me??? i don't quite understand the market so any advice/tips would be appreciated....I think it's a common misconception that a house is going to be a good deal to buy because the previously owner got foreclosed on.In my experience, banks are not stupid and they don't grossly underprice the houses they end up owning. They pay a broker to go out and give them an opinion of what the house is worth before they list it. So generally, it's priced slightly under market value. That's not to say that there aren't exceptions, but who cares. I think it's more important to find a house in a good location that doesn't have any serious defects. And most importantly, stay within your budget so you don't end up on that foreclosure list when you hit a speedbump in life.flipper Quote Link to comment Share on other sites More sharing options...
TonyH Posted October 11, 2007 Share Posted October 11, 2007 ok, so i'm sure everyone has seen that there are A LOT of foreclosures, especially in Houston. I went to visit a friend of mine and in their neighborhood i saw two homes with signs that state the house will be up for auction.With all these foreclousures one would think right now is a great time to buy, but then i heard that it's not.i'm confused. if i want to buy a house that is selling for less than what it's worth, wouldn't that be beneficial for me??? i don't quite understand the market so any advice/tips would be appreciated....Depends what you want to do with the house. Live in it, rent it out, flip it?I am seeing foreclosures as low as $32 per sq. foot! (Anything from $45 and below per sq. foot is a good price in my book).If you're looking for something to live in for more than 5 years, buy, if for less, just browse and rent!For investment, cashflows in Houston are excellent.To flip, forget it. Quote Link to comment Share on other sites More sharing options...
houstonmacbro Posted October 11, 2007 Share Posted October 11, 2007 That said, do you think the market is on a slight uptick or is it still crashing and burning (meaning, we have yet to see the real bottom)?I get conflicting reports. Some people say it has bottomed out and getting better, others are saying that loans are even more difficult to come by and therefore the markets have a long way to go before a rebound. Quote Link to comment Share on other sites More sharing options...
TonyH Posted October 11, 2007 Share Posted October 11, 2007 That said, do you think the market is on a slight uptick or is it still crashing and burning (meaning, we have yet to see the real bottom)?I get conflicting reports. Some people say it has bottomed out and getting better, others are saying that loans are even more difficult to come by and therefore the markets have a long way to go before a rebound.Unfortunately for owners, the weak borrowers of the last few years (through foreclosures) as well as the builders of new homes are keeping supply very high for the Houston market (in general) to see any significant appreciation. Sub markets within the Houston metro might outperform the averages (i.e. Galleria, Medical Center, Woodlands).On the investment front, I am seeing potential for 8-9% cap rates (net) which [to me] is very attractive for residential property returns. Also, all the 'would be' homeowners of the subprime era will now have to adjust and continue renting until they have some sort of savings to use as downpayment for purchasing a home in the future (=strong rental demand).In my opinion, it is not about the availability of money though, it is about affordability. If the average family cannot afford the average home, that means the prices have to go down. Case in point: Southern California with affordability at the lowest ever levels in 2005 (10-12% if I remember correctly).I consider Houston an undervalued market (below the US average home price). Affordability seems to be fairly high, therefore other than inventory pressure, I do not see much downside potential. Unless relative valuations change too. (Meaning I do believe that a California house should be more expensive than a Houston house, maybe by a multiple of 1.5 to 2 though and not by a multiple of 5+ as it is now). Quote Link to comment Share on other sites More sharing options...
moni Posted October 11, 2007 Share Posted October 11, 2007 Unfortunately for owners, the weak borrowers of the last few years (through foreclosures) as well as the builders of new homes are keeping supply very high for the Houston market (in general) to see any significant appreciation. Sub markets within the Houston metro might outperform the averages (i.e. Galleria, Medical Center, Woodlands).On the investment front, I am seeing potential for 8-9% cap rates (net) which [to me] is very attractive for residential property returns. Also, all the 'would be' homeowners of the subprime era will now have to adjust and continue renting until they have some sort of savings to use as downpayment for purchasing a home in the future (=strong rental demand).In my opinion, it is not about the availability of money though, it is about affordability. If the average family cannot afford the average home, that means the prices have to go down. Case in point: Southern California with affordability at the lowest ever levels in 2005 (10-12% if I remember correctly).I consider Houston an undervalued market (below the US average home price). Affordability seems to be fairly high, therefore other than inventory pressure, I do not see much downside potential. Unless relative valuations change too. (Meaning I do believe that a California house should be more expensive than a Houston house, maybe by a multiple of 1.5 to 2 though and not by a multiple of 5+ as it is now).True. I have a daughter who is a broker in SoCal, and she has been getting a lot of foreclosures from the banks. These properties are priced to sell and move in a hurry since other properties in the area are grossly overpriced. So the buyers are getting a good deal and the bank unloads these things and she makes an easy commission. Works good all the way around. Quote Link to comment Share on other sites More sharing options...
TonyH Posted October 12, 2007 Share Posted October 12, 2007 Here's a story on what I was saying about foreclosures and market pressure...http://www.chron.com/disp/story.mpl/business/5207834.html Quote Link to comment Share on other sites More sharing options...
gwilson Posted October 12, 2007 Share Posted October 12, 2007 Flipper is dead on. The bank isn't going to auction off a $200k house for $100k (with a few exceptions). In general, the only time houses are auctioned or sold that far under their value is if there are extenuating circumstances or the principal on the loan is extremely low. If that was the case, the bank would most likely offer a re-fi.The trick to getting a good deal on a resale house is patience and a fundamental knowledge of what is going on in a given market. Also, you should be weary. If a house is being sold for less than it is worth, there is generally a reason. The neighborhood could have a ton of homes for sale and not enough buyers so the prices have to be dropped to be attractive. Second could be hidden problems that aren't being disclosed. So make sure you cover your butt.Unless you absolutely want an older home or you need to move in tomorrow, in my opinion, it is almost always better and cheaper to build. But I'm a builder, so I suppose it is natural I'd hold that opinion. ;o) Quote Link to comment Share on other sites More sharing options...
jquintana Posted November 1, 2007 Share Posted November 1, 2007 ok, so i'm sure everyone has seen that there are A LOT of foreclosures, especially in Houston. I went to visit a friend of mine and in their neighborhood i saw two homes with signs that state the house will be up for auction.With all these foreclousures one would think right now is a great time to buy, but then i heard that it's not.i'm confused. if i want to buy a house that is selling for less than what it's worth, wouldn't that be beneficial for me??? i don't quite understand the market so any advice/tips would be appreciated....I am a network consultant and one of my customers is a very big lending institution here in Houston. Just today I posed this same question to them, as I looked at a foreclosure home yesterday. Their response to my question was very simple: "Banks are not in the real estate business so they need to unload those properties fast and recoup their investment."Take this as you wish... Quote Link to comment Share on other sites More sharing options...
Scott08 Posted November 2, 2007 Share Posted November 2, 2007 I looked at a foreclosed townhouse yesterday. Per my realtor, it sold for $300K when new in 2005, the bank loaned $270K on it, and it is listed at $215K. It's got some really spooky looking water damage inside that suggests either the roof, stucco walls, window sealing, or plumbing has been leaking for a while. He told me to run from it. What happens to a place like this? My guess is no individual buyer is going to risk buying into it even at this amount. A builder might see it as a fixer upper, but it might not be worth his effort either in an already sluggish market. Just as a what if, let's say they give up and it goes to auction and ends up going for much less, then could it be worth it for a would be owner to fix up? Quote Link to comment Share on other sites More sharing options...
PapillionWyngs Posted November 3, 2007 Share Posted November 3, 2007 You really have to be careful with foreclosed homes. We looked at a couple before we bought our current home. One had taken EVERYTHING - I mean - IT ALL! They took cabinets, appliances, ceiling fans, toilet fixtures, tub, sheetrock - it was stripped!!!! We saw another one damaged on purpose - the people so angry that they had to give up their beloved home. So sad. Quote Link to comment Share on other sites More sharing options...
slowloe Posted November 10, 2007 Share Posted November 10, 2007 I looked at a foreclosed townhouse yesterday. Per my realtor, it sold for $300K when new in 2005, the bank loaned $270K on it, and it is listed at $215K. It's got some really spooky looking water damage inside that suggests either the roof, stucco walls, window sealing, or plumbing has been leaking for a while. He told me to run from it. What happens to a place like this? My guess is no individual buyer is going to risk buying into it even at this amount. A builder might see it as a fixer upper, but it might not be worth his effort either in an already sluggish market. Just as a what if, let's say they give up and it goes to auction and ends up going for much less, then could it be worth it for a would be owner to fix up?Are you referring to the ones at Dowling & Polk? Quote Link to comment Share on other sites More sharing options...
mumbles Posted November 11, 2007 Share Posted November 11, 2007 I bought a 5 year old foreclosed home for less than half what it originally sold for, that was 20 years ago. Over half the neighborhood had been forclosed on so they had no choice but to give them away. Before I bought this house I went to an auction. Auctions often drive up the price. I started looking at older homes last year. Most have not been taken care of, people only lived there a few years. Most need a new roof and new siding, kitchen updating. Most do have a fresh coat of paint and maybe some new carpet. Cheap stuff that makes them look much better than a forclosure. If you have to replace the roof and siding I say go for the forclosure. You can look at HUD listings online and see what amount people are bidding. I would say bid at least 10 grand less than a bank is asking for a forclosure and get it inspected. Watch all the listings in the neighborhood you are interested in to see if the homes are sitting or selling. I expect things will get worse next year. You can look at the listings on realtytrac.com to see what homes are being forclosed on that aren't yet listed. Quote Link to comment Share on other sites More sharing options...
PapillionWyngs Posted November 11, 2007 Share Posted November 11, 2007 (edited) It is really strange, but about two months ago there were listings for foreclosures on HAR - they had their own category - now that category is gone. It was wonderful to look at, because we were looking for a house at the time. Wonder why they removed them? Edited November 11, 2007 by PapillionWyngs Quote Link to comment Share on other sites More sharing options...
jm1fd Posted November 12, 2007 Share Posted November 12, 2007 It is really strange, but about two months ago there were listings for foreclosures on HAR - they had their own category - now that category is gone. It was wonderful to look at, because we were looking for a house at the time. Wonder why they removed them?I didn't know it was its own category. I just noticed they were displaying the field on the listing details. I agree, it is too bad they took it off. Quote Link to comment Share on other sites More sharing options...
TheNiche Posted November 12, 2007 Share Posted November 12, 2007 It is really strange, but about two months ago there were listings for foreclosures on HAR - they had their own category - now that category is gone. It was wonderful to look at, because we were looking for a house at the time. Wonder why they removed them?They only removed them from the consumer site. Realtors can still search by Foreclosure status. Quote Link to comment Share on other sites More sharing options...
flipper Posted November 12, 2007 Share Posted November 12, 2007 I would say bid at least 10 grand less than a bank is asking for a forclosure and get it inspected.Who cares what they are asking for it? You should only be concerned with "what it's worth".flipper Quote Link to comment Share on other sites More sharing options...
Vertigo58 Posted November 12, 2007 Share Posted November 12, 2007 There was a news brief this weekend on how banks like Wachovia lost billions to foreclosures. Unreal Quote Link to comment Share on other sites More sharing options...
flipper Posted November 12, 2007 Share Posted November 12, 2007 There was a news brief this weekend on how banks like Wachovia lost billions to foreclosures. Unreal Pigs get fat, Hogs get slaughtered. flipper Quote Link to comment Share on other sites More sharing options...
TonyH Posted November 12, 2007 Share Posted November 12, 2007 Pigs get fat, Hogs get slaughtered.flipperAnd this is just the tip of the iceberg... (I think). It's not going to be until the middle of next year that we're going to start to see some real numbers...A couple of billion here, 5 billion there, pretty soon we're gonna be talking about real money :-) Quote Link to comment Share on other sites More sharing options...
flipper Posted November 12, 2007 Share Posted November 12, 2007 And this is just the tip of the iceberg... (I think). It's not going to be until the middle of next year that we're going to start to see some real numbers...A couple of billion here, 5 billion there, pretty soon we're gonna be talking about real money :-)In my estimation, the lion's share of the people getting foreclosed on now are the people who did 2 year ARMs who should have stayed renters. I think the foreclosures from that group will drop off within the next year, and then the people who did 5 year ARMs will pick up in another 3 years.flipper Quote Link to comment Share on other sites More sharing options...
TonyH Posted November 12, 2007 Share Posted November 12, 2007 In my estimation, the lion's share of the people getting foreclosed on now are the people who did 2 year ARMs who should have stayed renters. I think the foreclosures from that group will drop off within the next year, and then the people who did 5 year ARMs will pick up in another 3 years.flipperTake a look at this chart and add 4-6 months for the reset to become a listed foreclosure, that's where my next summer estimate is coming from:http://www.bubbleinfo.com/statistics-2007/...t-schedule.html Quote Link to comment Share on other sites More sharing options...
satriela Posted November 12, 2007 Share Posted November 12, 2007 HAR.com is a strange bird. I remember when foreclosures was its own section and yeah, now its gone. HOA fees are also up and down within detailed listings...one day they are there, the next day they are gone. I wish you could search for keywords on HAR.com like you can on chron.com but sometimes foreclosure isn't listed in the description.... Quote Link to comment Share on other sites More sharing options...
flipper Posted November 12, 2007 Share Posted November 12, 2007 Even with it's faults, HAR.com is the best consumer mls site in the country. Hands down.flipper Quote Link to comment Share on other sites More sharing options...
TonyH Posted November 12, 2007 Share Posted November 12, 2007 HAR.com is a strange bird. I remember when foreclosures was its own section and yeah, now its gone. HOA fees are also up and down within detailed listings...one day they are there, the next day they are gone. I wish you could search for keywords on HAR.com like you can on chron.com but sometimes foreclosure isn't listed in the description....Actually you can search with both keywords and the foreclosure flag (under disclosures), but only if you have 'realtor password' access to it.Some listing agents though are avoiding the 'foreclosure' disclosure by describing it as 'corporate owned' (as if we don't know what it means)... :-) Quote Link to comment Share on other sites More sharing options...
satriela Posted November 12, 2007 Share Posted November 12, 2007 Even with it's faults, HAR.com is the best consumer mls site in the country. Hands down.flipperI TOTALLY AGREE!! I was helping my mom look for property in my hometown (Tallahassee, FL) and got so frustrated because I'd been spoiled by har.com Quote Link to comment Share on other sites More sharing options...
foxmulder Posted November 12, 2007 Share Posted November 12, 2007 I TOTALLY AGREE!! I was helping my mom look for property in my hometown (Tallahassee, FL) and got so frustrated because I'd been spoiled by har.comI had a realtor set me up on a notification system. I said "West of this street., 4 bed rooms..." and get emails, Granted i don't think they want my business cause i can't get ahold of him. I found a nice foreclosure market 137 for 102k. Decent shape, Some rotting gutters...But who cares. Quote Link to comment Share on other sites More sharing options...
banking214 Posted November 12, 2007 Share Posted November 12, 2007 If you are going the route of buying a foreclosed home, you may want to look at HUD (www.hud.gov). Also, you can check with lenders on there REO listings. One of the Houston lenders that is now defunct currently has a site you can view listings. https://www.aegissvg.com/REOListing.aspx. I think someone mentioned this before, but sometimes the homes are not in the best of shape. Upset homeowners have been known to loot the house of the kitchen sink, fixtures, etc. Quote Link to comment Share on other sites More sharing options...
Mystilayne Posted November 13, 2007 Share Posted November 13, 2007 Actually you can search with both keywords and the foreclosure flag (under disclosures), but only if you have 'realtor password' access to it.Some listing agents though are avoiding the 'foreclosure' disclosure by describing it as 'corporate owned' (as if we don't know what it means)... :-)Hi! I am a Realtor in the Houston area and this is my first time to post on here...so please bear with me. I may tell you info that you already have but here goes:I am an authorized BPO (Broker property opinion) Realtor that is sent out to inspect foreclosed homes before they become available. As mentioned before we give our opinion on what it is worth and then the bank factors that in along with what is owed on the loan, repairs needed to the property, current market conditions, etc. Once the asking price is determined we are instructed on how to list it. The majority of the banks require us to list it as Corporate owned instead of as a foreclosure (depending on the type of original loan it had on it). This is not an attempt to trick the consumer into thinking it is not a foreclosure.If you want to see a list of the foreclosures that are currently up and do not want to sort through Har.com you can go to www.southwestalliance.com and look at them on there. It gives you the property address and the deadline for all bids on that particular property. You still need to go through a HUD authorized Realtor to bid on it but it gives you the opportunity to look at the properties currently available in your own time. Quote Link to comment Share on other sites More sharing options...
rvas1011 Posted November 13, 2007 Author Share Posted November 13, 2007 some great links are given in this thread!does anyone know how one can go about finding listings of lender foreclosed homes?i hear that it is difficult to get a list from the banks... Quote Link to comment Share on other sites More sharing options...
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