eHomeSales by Shawn Jardine
Repo Repo Who’s Got the Repo?
Bank repo’s are getting harder and harder to come by in Colorado Springs. The bank owned homes known as “REO’s” are not appearing on the market as much as they used to. Why? It seems that the rise in short sale and loan modifications has reduced the foreclosure rates–for now anyway.
Banks are also holding what the industry calls “shadow inventory. ” This means that the bank actually does foreclose on a home but just lets it sit there for a while. They are trying to manipulate the market for some reason. Some speculate that they are still trying to show profits on their books so as to affect the TARP re-payments. Others say they are just trying to drive up the demand for foreclosed homes. I do believe that is true.
Anyone who watched the REO market as closely as I do can see that the demand for homes is there. On a rcent REO listing that I had, there were multiple offers within days of the home going into the MLS. The home had offers at least 20K over what I would pay as an investor for this home.
They’ll learn the hard way
Why are buyers doing this??? I’ll tell you why–they watch too many late night TV shows telling them they can make an easy profit in real estate. Rookie investors get emotional when buying homes. Many times they get a thrill from just being the winner of the bid but forget to really look at the numbers. They later find out that the home was not a good investment at their offer price.
Buying an REO takes skill, patience and a bit of luck! In this market it is very important to have cash to purchase a home or you will be beat out by other investors who do. You must get creative to be able to find money sometimes. I once bought a modular home with cash advances from my credit cards! It made my family a bit nervous but I was able to make 30K in a short period of time by taking that risk.
Don’t fool around–call an expert
If you want to play in the repo game, it is a must to have an agent who is an REO expert working for you. I am that agent! I knw in advance abot listings that will be coming on the market. Don’t depend onthe old school idea of searching the MLS and calling listing agents. By the time you find the home, it will be gone to a more savvy buyer.
Contact me or leave a comment below if you want advance notice of bank owned REO listings coming on the market.
