Maria Rogers...REO, Foreclosure and Short Sale Expert

 $3,900 list price, bank owned property as is

 

maria@mariacenter.com

513-255-0826

Any investors looking in Springfield I have a listing coming up under $25,000 please let me know- 3 bedroom home currently in evictions

Bank owned property

513-255-0826

maria@mariacenter.com

New listing coming up at 3539 Purdue in Cincinnati for $7,000 

Avondale area

Please let me know if you or your buyers would like to be added to contact list when the house comes available soon

maria@mariacenter.com

 

When it comes to helping sellers in foreclosure I feel like I am in so many grey areas the whole situation is overwhelming.

In my super slow market area the only people who seem to be buying short sales are investors.

Investors who want to make a buck (as well they should).

Investors who would like to have the help of an agent willing to bend the rules- to influence a BPO agent with some convincing low ball comps and a repair list to restore the place up to the Taj Mahal level using the contractor with the largest Yellow Pages ad.

Investors who have cash and can buy now, today, who don't mind waiting six months while three negotiators quit, the package gets lost and refaxed eight times, etc.

Investors who won't need an FHA loan that the home won't pass because it's missing a few shingles or has a bit of torn (eek trip hazard!) carpet.

I get approached as an agent who works with distressed properties and REO by investors all the time looking for great short sale buys... and I have no problem with bargain hunting. I made my living as an investor for years.

Here's where I get a little worried... a lender calls me wanting my opinion on the value of a house. The agent has the house listed for example at $150,000 (which is a normal nice family home in my area). I call the agent to see if there have been any offers, if the home needs repairs, etc.

Yes, they tell me, we have an offer for $80,000 (really? why is it listed for $150,000 if it's worth $80,000... first red flag).

It needs $50,000 worth of repairs they say. Wait, I have a list! I will meet you at the property along with my three brothers who work as bouncers in a bar holding comps you better use because we know where your office is they say (ok, that part is an exaggeration but not by much)

Second red flag.

I visit the property and the repairs are for a new kitchen, new roof, and all new bathrooms. House is about six years old and is in pristine condition.

Third red flag.

I tell all agents (nicely) before I visit a property I will not accept comps provided by them because 1. I know how to find my own comps or else I shouldn't be agent. 2. It's unethical to try to influence a BPO or appraisal.

What's going on here? The agent is collecting high price offers close to list price from retail buyers. Those don't get presented to the foreclosing lender. The only offer the lender sees is the low offer from the investor.

If the inspecting agent agrees with the listing agent and decides to do as they're asked, the investor (and usually also the agent) makes a good profit on the sandwich money in between what the investor is paying for the property and what the end buyer pays.

Okay, so who benefits? The investor, the agent and the end buyer who although they are paying close to retail usually gets a bit of a bargain. The end buyer doesn't have to wait three years for an answer to their offer because the bank has already agreed to do a short sale. The seller benefits because they get out of a foreclosure. Everyone is happy right?

But what about the lender who is leaving thousands on the table without knowing it? Are they our client and do we owe them a fiduciary duty? I guess technically they are not- at least in Ohio the seller owns the property until the house goes to sheriff's sale. Anyone who has hard a short sale listing go to sheriff's sale knows how tough it is to make that dreaded phone call to a seller. But don't we have an ethical responsibility to be honest in our dealings even with a non client such as the foreclosing lender?

Short sales are an important  part of the real estate market these days, and likely will be for many years to come. I started doing short sales in 2003 before most people had ever heard of them as I have always worked in a depressed market.

Situations like the one above are going to keep happening, and are going to become even more prevalent, until some force steps in to regulate short sales AND make them easier on the agent, the seller and retail buyers. Until then, in depressed markets there are two dismal choices- bend the rules or tell the client you probably can't help them because buyers have wised up and are no longer willing to dangle from a hook for months waiting for an answer to an offer and neither are their agents.

I really don't like either :-(

 

Good deal on my new foreclosure listing, please call me to take a look!

 

Thanks Jim and Cindy I hope you love your new home. You worked really hard and stayed calm and cool until the end, even remembering your middle initial ;-)

James, as always, my favorite co-realtor and friend, thank you too.

Erica Howard you are the bomb!

Thanks everyone and keep in touch!,

Maria

I love being an agent who specializes in bank owned foreclosure properties but I love buying them and reselling them even more.

Buyers ask me all the time if they can really make money buying and selling investment properties and foreclosure and the answer is YES! But, wow is it tough when you have no idea where to start.

Every time I met with a newbie investor I found myself telling the same stories and giving the same warnings and one of my friends jokes that I should write a book about all of the funny, crazy things that have happened to me in real estate so that other people could learn from my mistakes.

So I did! And here's a free copy for you. I hope you enjoy it and find your passion in real estate the way I have!

Download My Ebook

I just finished sending an email to a client who bought a house through me about four years ago.

In it, I was explaining something no one else is really writing about.... how taking a loss can be a good thing.

Saying this makes me sound crazy! No one wants to take a loss on their property, right?

There was a time when I took a loss on a house that I am very thankful for.

The first house I ever bought back in 1996 I thank God every day I took a loss on when I did.

At the time, the house was all we could afford, and at the time it was also in a decent location. I paid $52,000 for it as a college student with very little income. I admit that I refinanced the hell out of it like many of us do before we learn the ropes of what's a good decision. Those refinances helped me to overimprove the house (shame on me I do that with every house I live in :-), pay for extra expenses when my daughter was born, buy a car, switch jobs, get out of credit card debt, etc.

I rented it out for a while but like all of us who are landlords know NEVER rent a house you are emotionally attached to (a house you used to live in) because it will bother you even more when the tenant destroys it. I fixed it up again to sell and by the time all was said and done I ended up losing about $20K on the house.

Boy was I lucky. That house today would bring about $35K in pristine condition because the neighborhood values have dropped so much. When I sold it I got $85K for it which was a very fair price at the time, amazingly only about 5 years ago.

But "losing" that money was worth it. You see, I really didn't lose that much. I had taken the equity out and spent it on other things, and even though I don't recommend everyone do that it helped me in times when I really needed the money. The trick is eventually I was earning enough to pay up.

The client who I was talking with is a little more disciplined than I was. He owes more than he can get simply because the economy has gone down.

But he can take a loss and be glad too and here's how I explained it....

"You owe about $81K

Let's say your house sells for $75K in today's market With fees and taxes that have to be paid and commission and all that jazz let's say selling the house costs $86,000 for example. So you're short $11K (this is just an example).

You would have to bring $11K to closing as a loss.

That part sucks.

Here's the good part though.

Everyone else is selling for less too, especially the banks. So you make up your loss when you buy for less. It's kind of a wash. Most people can't understand this part... YOU lose but THEY lose too. It evens out.

Say you buy a house for $40K that needs work. You get a FHA 203K rehab loan for 3.5 percent down. You fix it up nice and you have maybe $55,000 in it and then you have a house you really like, the way you want it, that doesn't need any work.

Your payment is at the low interest rates of today, probably less than what you're paying now (under 6 percent usually, sometimes closer to 5).

So say your current loan is at 7 percent (I don't know for sure this is just an example) and you're paying $552 a month principal and interest. The new loan, assuming a rate of 5.7 percent at 55K would be $319.22 per month principal and interest. You save every month plus you have a house that doesn't need any work at that point and it's the house you want that fits your needs.

If you keep your current house as a rental you're looking at a break even likely every month rather than a profit, which makes that plan not so appealing.

The downfall is you no longer have the money you lost on the first house.

If you don't sell your current house, then when the market turns around if you're in the house you're in now you can clear the loan without a loss and buy another house that's pretty much the same for the same price or buy another one and invest more.

On the other hand, If you're in the fixed up house you can sell it and likely make some money, or you just have really low payments and you have a house you like and you don't have to worry so much every month. You'll get your $11K loss back and then some if you resell the new house in a good market."

The most important thing if you sell and buy the house you want NOW, you're living the house you want NOW, rather than waiting for years to get there. Make sense?