Boise Real Estate | Boise Idaho Homes For Sale

Buying REO & Short Sale Properties

I’ve heard some interesting things lately that I want to share my opinion on–purchasing REO (bank-owned) and Short Sale properties.  The Boise area has a lot of REO and Short Sale inventory.  I understand that my opinion is only mine, and rather lowly at that.  However, I hate to see people miss out on good deals (and better investments) because of bad information.

When shopping for a new home right now, you will certainly see and hear about  REO’s  (or bank-owned, which is the same thing) and Short Sales.  Here’s a quick run-down of these two categories.

Defining REO:  REO stands for Real Estate Owned, which is how banks categorize these assets on their balance sheets.  REO properties are actually owned by the bank.  The bank had loaned somebody money who didn’t end up fulfilling their obligation.  The bank foreclosed and ended up with the house back.

Defining Short Sales:  Properties advertised as short sales are still owned by individuals…the banks do not own them yet.  The owners are in a situation where they want or need to sell, but owe more to the bank than they can sell the home for.  In this instance they try to “short sell” the property, which means asking the bank to accept less than what is owed on the loan to allow the sale to go through.

The best deals right now involve REO’s and Short Sales.  Your agent should be willing and happy to show you both of these sets of properties, if you so choose.  Here are the things to consider as you decide if you want to:

REO Opportunities and Warnings:  Banks are in the business of lending money, not owning property.  They want to get rid of their REO inventory, so generally sell below market value to move homes more quickly.  This is why you can get great deals in this segment.  Often the homes aren’t in pristine condition, the utilities are off, they are dirty, etc.  However…savvy home shoppers can see through a little dirt, grime, or minor repairs.  The closing process is fairly easy and straightforward on REO houses.

Short Sale Opportunities and Warnings:  Short sales can be vacant or have the owners still living in them.  Some are in perfect condition while others need some imagination to see the possibilities.  Usually these homes are in the foreclosure process, meaning the banks could end up foreclosing on them and taking them back if they don’t get sold first.  The bank has to approve any short sale, which is where the difficulty comes in.  Offers on short sales generally include more time and uncertainty than traditional transactions.  There are some short sales, however, that are already approved by the bank at a given price.  These deals can close very quickly, as the bank has already done their research and given their approval.

As always, the key to any successful investment (and your house IS an investment) is how you BUY.  You make money when you buy.  Don’t let people scare you away of considering REO’s and Short Sales.  With the right attitude, outlook, and assistance, this process can be a great way to land an excellent deal.

Adam Levanger, Realtor, Silvercreek Realty Group, 208.440.6231

Boise Area Real Estate Thoughts, April 24, 2009

Spring is upon us, and the Boise area real estate market is definitely feeling the it.  From one humble inside observer, activity is certainly starting to heat up in the area.  Here are  a few thoughts for the day:

1.  We’re starting to encounter multiple-offer situations:  It’s been awhile since a buyer ran into the uncomfortable situation of multiple offers (or the seller enjoying this fine treat).  We actually had this situation this week, where our clients submitted an offer and another buyer did the same thing.  This is tough for us to deal with but does show some promise for a fledgling market.  Either we’re really good at finding great deals that attract savvy buyers (which we try to be), or the market is starting to move some (which it is).

2.  We received an offer this week on one of our listings, so it  now has a pending contract on it:  This is great news and is another example of the market turning.  With the $8,000 tax credit (thank you, big brother) and some very favorable lending options, buyers are starting to come our of the woodwork…just like the sun creeping out of the depths of winter.

3.  Others in the industry are talking:  I try to ask anyone in the industry what their view of things are right now.  Nobody is crying anymore.  Things aren’t flying high like we would prefer, but there is certainly activity out there.  I haven’t spoken to anyone in the last several weeks that thought things were getting worse.

4.  The lending situation is stabilizing:  I can’t say we’re out of the woods yet (because we’re not), but loans are actually coming wrapped in a little bit of common sense now.  Where a couple of years ago you couldn’t believe they would give money to somebody, last year you couldn’t figure out why they wouldn’t give money to anybody.  It seems that cooler heads are prevailing and the loan market is starting to function again.  Brokers can actually say, “I think we can close in about 30 days,” which, believe it or not, was not the way there for awhile.  Along with some awesome down payment programs (which I’ll write about in another post), the lending market is working again.

5.  There are lots of homes to buy:  This is both a joy and a curse for a wanna-be Realtor like myself.  It’s very fun to allow our clients to pick and choose…but is can sure take a lot of time to look at all those houses:).  We do it happily, though, because we’ve seen it the other way (where a buyer had to make an offer immediately without the opportunity to look at many homes).  This is lots of fun and provides us the chance to find hidden deals out there (which is my absolute favorite thing to do).  Many great options exist to buy low (including REO’s and short sales).

All in all, my thoughts this week are very optimistic.  We are not flying high yet.  I don’t know that we’re at the bottom yet (you never know that until you’re half way up the other side, unfortunately).  However, there are some nice things happening.  The other great thing is that we haven’t had any horrible news for a couple of months, and the powers that be are trying to inject some optimism and confidence in the markets, which is like precious rain in the driest desert following a lengthy drought.

Until next time….

Adam Levanger, Idaho Summit Real Estate Team, Silvercreek Realty Group

Boise Area Real Estate Market Thoughts

The last several months have been fascinating to watch unfold.  Although you may take the statement as somewhat sadistic, it really is amazing to see how our entire world is linked in so many ways (most obviously economically right now). The local real estate market has also been an interesting study.  Watching the ups and downs, trying to figure out what’s going to happen next, working to find the best deals, and hoping for the best for everyone.

I have had the pleasure of working with a couple of buyers that have been a lot of fun and taught me some important lessons about the current market.

1.  A deal is a deal:  I tell people all the time that, looking at it from a historical and current perspective, a deal looks good on paper.  However, I don’t know what that deal will look like next month, next year, or beyond.  However, there comes a time when people hunker down and make the deal.  I have been AMAZED at some of the deals out there.  I understand that we may not have yet reached “the bottom,” but the fact of the matter is there are some great homes and great prices, if you’re in the position and situation to make something happen.

2.  Bank owned properties offer the best opportunties:  Banks are in the business of selling money, not owning real estate.  They don’t like it and they don’t want it.  They are willing to negotiate and make things happen.  They would rather get somebody in the home and cash out before sitting on it, waiting for the market to turn.

3.  Don’t be afraid of short-sales, but it has to be the right fit:  Short sales offer buyers the opportunity to negotiate a better deal with the bank prior to a foreclosure.  Banks are motivated so they don’t have to go through the hassle and expense of foreclosing.  The big deal here is to have some flexibility and the ability to wait a little bit.  Investors can clean up on this type of deal.  Homebuyers looking for an exact fit may not enjoy the process as much.  You may end up writing a couple of deals and waiting a long time to make one go through, but when it does it ends up being a great deal.

4.  The market does not represent traditional sellers/buyers:  The current market right now is based on short-sales, foreclosures, investors, and deal-finders.  When somebody asks how much their home is worth, it’s really tough to come up with an intelligent answer.  The basic thought process goes like this:  It’s worth more than those selling around you as short-sales and REO’s, but you wouldn’t be able to sell it for what it’s worth right now.  I know that’s a bad answer, but it’s the truth.  With so many motivated sellers out there right now, that becomes the market.  The market for traditional sellers has been overshadowed and overtaken by deal properties.  Until the foreclosures stop and the short sales dry up, this may be what we are in for.  The great part about it, however, is it won’t last forever.  If we’re not forced to sell, we can simply wait until a better day and come out of it better than it appears today.

“I’m waiting…don’t tell me it’s a buyer’s market!  Tell me when it’s better and I’ll think about it!” This approach is fine with me.  It’s interesting, however, to see how wealth is built–it’s all in how you BUY.  The money is made at purchase, and most big deals happen when the other party is motivated (like banks right now).  They are willing to sell for less to make a deal happen.

Anyway…I wanted to share these thoughts with you and let you know that an active market exists right now…you just have to see it for what it is.  Those looking for a deal can find it now with the right mindset and goals.

Buying at the bottom of the Boise real estate market?

It’s been a crazy ride in the Boise real estate market over the last couple of years.  The difference between now and just two years ago is incredible to think about.  We have gone from homes selling in minutes to silently waiting for calls on fairly priced, nice homes.  The homes that are selling now are screamin’ deals…and I can’t blame any buyer for that.  The current conditions make is possible for a buyer who has a touch of gumption to get a great deal. 

Some will end up buying at the bottom of the market.  Some will wait for it to start rising before venturing out and finding a new home.  And still others will wait until the market is hot before buying for top dollar. 

I am not of the group that claims to know when the bottom arrives.  Life is always a risk, and especially so in real estate.  The key that I explain to my buyers is that, no matter what the market conditions, you do your best to buy low.  In any market you can find homes that are overpriced.  Sometimes you can find homes that are underpriced.  The goal is to not overpay, and hopefully even find a better deal than anyone else can get. 

 As a real estate investor myself, one of the goals I follow is that there will always be another deal; Don’t make a deal just to make a deal. 

In this current market, however, there are some really good deals out there.  There are buyers who are extremely motivated, including banks (REO), investors, and some homeowners who just need to get out.  Short sales are tough to work with for the patient, but not an impossible quest if you have the right mindset.  Rental properties are available now that even cash-flow, which was a hugh flaw in the market even a year ago.  I am a fan of fixer-upper or rehab properties, which can be purchased at a deal now…with the only difficulty in selling it when you are done.

My main advice for those considering an entry into the buyer market (as personal residence or even investor) is to start looking now.  It takes time to buy right.  It takes shopping and comparing and knowing when you see a deal. 

Feel free to search at idahosummitrealestate.com for homes.  You can also email or give me a call and we can sit down and carefully figure out your goals and desires, which will allow us the ability to find the right fit at the right (low) price.

 Regardless, good luck to those entering the market as buyers.  The opportunities are there…just be careful and be educated.

6868 Glencrest, Boise Idaho Virtual Tour

I wanted to show my first virtual tour presentation for my home listing at 6868 Glencrest in Boise.  This is a great home that has been totally remodelled.  You can check out all the details in my Featured Listings (and research other Boise Idaho real estate topics as you wish).  Anyway…enjoy the presentation!