Buying Bank Owned Property
Buying a bank owned home, sometimes labeled REO, is very different from buying a short sale, or “short pay” home.
A transaction on a home which is bank owned is usually much easier to manage, and a contract offer on a bank owned home is responded to more quickly than a property subject to a short sale/short pay.
The biggest problem with buying a bank owned home is not the paperwork, per se, but rather the home itself. Many times the home is in poor physical shape, but apparently some banks are taking steps to remedy this problem.
Automated Home Appraisals Unreliable
I remember last year I helped a seller market and manage the sales process of a penthouse condo in Boulder. We had two buyers, both wanting to make the purchase with cash (no loan), and one of them backed out.
This was a bit of a surprise since this buyer insisted they understood the market, and what a rare opportunity and great value this property was in the Boulder housing marketplace. This buyer’s discussion with an appraiser ‘friend’ gave them cold feet, and they lost trust in their own knowledge base and instincts.
It was no surprise to me that the second, “back-up” buyer, swooped in and made an offer the moment the first buyer backed out.
What was interesting was how divergent the appraisers were in their professional value opinion compared to everyone’s instinctive sense of the value. Even the two appraisers I spoke to expressed that they had a sense that the value of the property was at or above the price in the contract, but both said that the methodology they had to use to create a professional appraisal wouldn’t allow them to get the price as high as the contract price.
A recent Wall Street Journal corroborates this dilemma.
Colorado Growth Rate 9th Fastest in US
According to the latest preliminary US census data released this Tuesday, Colorado is the ninth-fastest growing state.
This covers the period from the years 2000 through 2010 both based on population increase (an additional 727,935 residents), and percentage increase (16.92 %).
This hardly compares to the massive influx of new residents during the boom-time of the 1990′s when the growth rate was more than 30%, with over 1 million new transplants to Colorado.
There’s reason again for optimism that we’re entering into a strong and robust growth pattern. I’m seeing ever increasing activity in the real estate and job market. When talking to the owner / broker of our RE/MAX office the other day, he shared statistics that we’re already out pacing the sales volume at this time this year, compared to this time last year. That’s significant because last year the tax incentives for real estate purchases were driving a lot of activity in the market. There are no incentives in place currently, but still lots of activity.
Real Estate Market Trends and Reports
Each year, the National Association of Realtors (NAR) polls people who bought and sold homes and creates a very large and comprehensive report on what NAR learns from buyers and sellers.
Real Estate Information Systems (RISMEDIA) recently sent me a rundown on some of the highlights of the report. I’ve included that RISmedia report for you here. Some of the basics indicate that home owners are staying in their homes longer than in previous years, seeing pretty good equity gains, and house ‘flipping’ has almost disappeared from the marketplace, with the exception of some experienced investors with the power to make cash purchases.
Boulder County Unemployment Rate Still Low
Last week the Boulder Daily Camera ran an article with a headline saying that the Colorado Unemployment rate is on the rise.
If you took the time to read the article, you’d see that once again, the media likes to do its best to sensationalize whenever it can.
Now, a friend recently said that we in the real estate profession have a tendency to always put a positive spin on things. While this comment may not have been intended to be a compliment, I took it as such.
Too many people spend time looking for, and dwelling on the negative. Well, here’s some positive: Boulder County’s unemployment rate dropped to 6.4% in August.
