Fun With Foreclosures

The foreclosure glut continues here in San Diego County, and there are new twists every day just to keep life exciting! For example, we have a bank who refuses to sign the Smoke Detector and Water Heater disclosure even though it is required by California law. The bank's response? "WE DON'T CARE WHAT CALIFORNIA LAW SAYS." So Mr. Buyer, if you want this bank owned property you have to buy it without the protections afforded you by law, because the bank DOESN'T CARE WHAT THE LAW IS. Definitely buyer beware!

And the buyers are out there clamoring for these properties. Just this morning I checked out 96 homes for a few potential buyers I'm working with in North County. Most of them were in bad areas or short sales. The best one is a bank owned property in Rancho Del Oro, a nice family area of Oceanside. 1919 square feet built in 1996, listed for $343,900.


This property has been on the market for 10 days, and if definitely a good deal. Here's the catch - there are 30 (thirty) offers on it as of this morning! Countrywide bank, the seller, has countered everyone verbally with "highest and best", meaning take your best shot. So the house will definitely sell for significantly higher than the asking price. As I said in a previous blog posting, you have to look at these things as an auction, with the listed price merely the starting point for the bidding.

How high will it be bid up? This last week we were working with a buyer who made a $350K bid, all cash, close in two weeks, on a bank owned property that was listed at $308,900. We didn't get it! I won't know what it sold for until it closes escrow, but it had to be more than $350K, or at least 13% above asking price.

Now here's the point I want to drive home - there were 30 offers! In this supposedly dead market where no one is interested in real estate anymore, thirty buyers were looking for property, saw this one and made an offer on it. Thirty! What does that tell you? What it tells me is that there is an enormous pent-up demand for housing in this highly desirable area of the country. I promise you, for every buyer who is out there trying to find a good property today, there are ten more who are sitting on their hands waiting for the bad news to blow over. And when it does, there will be buyers flooding the market, there will be panic buying, and prices will rise very quickly. Mark my words!