Foreclosures, Short Sales, and REO's, OH MY!

Posted by Peggy Aldinger on Mar 14, 2008

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ORANGE COUNTY, CALIFORNIA FORECLOSURE UPDATE:

The Orange County real estate market now consists of mostly bank owned properties for sale.

The banks are scrambling to rid themselves of this massive inventory. Listing agents are presently allowed to list at whatever price they want and a lot of them are listing way below market value.

This doesn’t mean the banks will take this low offer. In fact, I can almost guarantee they won’t. Unscrupulous agents are doing this just to get offers in and scoop up buyers (new clients).

I am seeing multiple offers on REO’s to be the norm right now, any where from 90 to 180 days or more for the banks to get back to the offerers.

What does that mean?

Buyers aren’t buying. They’re waiting for a deal that is usually too good to be true.

This sends a wave of unfounded panic to normal home sellers. Home sellers look at these comps and think they too have to list their homes at these undervalued prices thus losing precious equity unnecessarily.

I see that investors are buying these scenarios up like crazy! Preying on unsuspecting homeowners is the biggest way for investors to make money right now, unfortunately.

As Realtors, we have a code of ethics to abide by. Are those agents that are listing ridiculous numbers to blame for declining home values, probably not but they certainly aren’t helping matters.

I feel we need more stringent guidelines and laws on MLS pricing.

I saw a bank owned home today listed at $140,000. The same identical home across the street (non-REO) was listed at normal market value $625,000. I called the listing agent and he told me it was a way to get buyers and offers in.

By the way he had 20 offers in and told me the bank would not even look at anything under $600,000!!!

Is this ethical?

These times call for unity and forethought. Let’s put a little law and order back into the wild,wild west of Real Estate!

For more regional and local real estate market updates, visit the HomeGain Blog’s Regional category.

For more on Orange County Real Estate click here.

Comments

I don’t think we need lawmakers deciding what prices can be placed on a home, but these tricks need to be exposed.

Posted on Mar 15, 2008 by Mike Farmer

The situation in orange county indicates that banks are in a good position to make loans but ill equipped to take posession of the homes that they have lent money to purchasers to buy.
Perhaps if banks are regulated in their lending practices, they should also be regulated in their disposition of assets practices?

Posted on Mar 15, 2008 by Louis Cammarosano

Isn’t this the truth. As a recent home buyer myself, I must say- we landed a deal but we were not seeking a deal. We were seeking ahome that we loved. It was a completely emotional buy for us and that is what the average consumer is missing- they need to be “feel” the deal not because of the price but because the emotional “value” they gain by living in their dream home. I can tell you this right now, we would have paid more to live in the home we do, we love it that much. So, to these bargain hunters: you can’t put a price on being happy in your home.

Posted on Mar 16, 2008 by Real Estate Blogs

I think that’s a bit cheap to use the sluggish market conditions to post unbelievably low prices to attract leads.. Not so savvy in my opinion.. I feel there’s a bit of fiduciary misconduct as a matter of fact.. Who’s the owner of the property and how do they feel about this low price being advertised.. Interesting though.. At the end of the day they can’t sell the home.. Real Estate agents are becoming very “loose” with the way they conduct business.. The next big commerical law pitch on TV will be: “Have you been the victim of negligence by a real estate agent? Call me _ (Law firm inserted here)... For the People!” We’re in the scope of attorney’s looking for business as well.. Better watch how you run your business real estate outfits.. You are next to pull documents and show good-faith operations of your business!

Posted on Mar 16, 2008 by www.thesarasotadeed.com

No this isn’t ethical. If there is no way the bank will look at any offers below $600k then it shouldn’t be listed that low. This agent is using their client to serve the agents own interests. File a complaint with the board.

Posted on Mar 16, 2008 by Ken Smith

If you know that this is going on, and your are not filing an ethics complaint against that agent, then you, too, are in violation of the Realtor’s Code of Ethics.

Neither Agents nor Brokers can set a list price, on their own, without the Seller’s approval.

Sounds like more than an ethics case!

Posted on Mar 17, 2008 by Myron Freeman, PB

I have sent a complaint and repport to the DRE and my Local Board and encourage all realtors to do the same. Thanks for your comment!

Posted on Mar 17, 2008 by Peggy Aldinger

“Is this ethical?”

Of course it isn’t ethical. It’s utterly asinine.

Posted on Mar 17, 2008 by Jay Thompson

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