Foreclosures Sell for Less/Read the Disclosures!

Interesting topics arise every day when I’m out there selling Albuquerque real estate. I encounter everything from silly questions to major construction problems and just about everything in between, but I rarely write about them.  Not because I don’t want to, but because of a lack of time.

Rather than keep these to myself, and since I think these two things that happened to me yesterday are worth sharing, I’m going to post them here even though there were somewhat  hastily written. After all, I have contracts to write and homes to show today because the market is Hot!

Foreclosures Sell for Less

I got a call yesterday from a stranger who asked me to give him some information on a property. I get calls like this every day. They don’t usually result in a sale, but I’m always happy to look up property info for people.

As I was logging into the MLS we chatted and I found out that he was calling about a condo that he had owned that had been foreclosed. He wanted to know why it was for sale for so little money two years later on my property search website

I looked it up and told him yep, it’s a bank owned home. He was astounded, first that it took so long to make it to the market, and second, that it was for sale for so little. When I confirmed it was listed at $115,000 he became agitated and asked me, “why didn’t the bank take the offer we got at $145,000 when the house was listed as a short sale?

Of course I didn’t have an answer for him, not knowing the details of the situation. I took a minute to tell him I was sorry and let him blow off a little steam.

Then he asked me how the market was doing. When I told him it was doing quite well, he asked,”if the market is so good, why is my old condo now only worth $115,000?”

I explained that bank owned homes Buyers Save Stacks of Cash on REO'ssometimes sell for 15 to 20% below market value. He was surprised (this was a good reminder for me that many consumers really don’t know what’s going on with real estate, especially with short sales and foreclosures).

I also explained that yes, when a bank forecloses on a property, they may sit on it for quite some time before they place it on the market, and when they do sell it, they may even sell it for less than what you were offered when it was a short sale.

The conversation took about 30 minutes of my time. Time spent that will never result in any commission dollars for me, yet I felt an obligation, like I know many of my good Realtor friends do, to the public. Besides, it’s always good to be courteous and kind.

I will have to admit, though, that after I hung up the phone I wondered to myself, “maybe this is why some Realtors never answer their phones and only return voicemails?

Read the Property Disclosure Statement!

I had a buyer poised to make an offer on a foreclosure home, and as I was writing up the offer paperwork I did something I often do.  I looked back at old MLS listings of the house to see what I could learn about its history. This house had been on the market 4 or 5 times since 2006, when it was built, but had never sold.  Not all that unusual in some parts of the metro area where beautiful custom homes were built and sold at peak prices at the height of the bubble.

Looking through the old MLS listings I found an old Property Disclosure Statement from 2006. In it, the original owner mentioned a certain kind of plumbing had been used in the house. This was a type of plumbing I had never heard of so immediately I Googled it. The first website that I found was the official website for the class action lawsuit involving this type of plumbing (and no, it wasn’t polybutylene plumbing).

The second site I found was a consumer action site featuring videos of unhappy homeowners with newer houses with this type of plumbing, one who described that living in his beautiful new house was like “sitting on a ticking time bomb.”

Of course I nearly choked on my coffee.

I wrote up a quick email and sent my client the links, then called them to explain what I had found.

I hesitated for a second before I started dialing because I was experiencing a really weird combination of dread and elation. I didn’t really want to burst their bubble about this beautiful home, yet I was very proud of the fact that I had done a little extra work and I had found something that was really, really important and may have saved my buyers $10,000.

By Albuquerque Real Estate Agent Rich Cederberg, eXp Realty. Call or Text me at (505) 803-5012.

Albuquerque Homes for Sale

 

If you enjoyed this article, Get email updates (It’s Free)

About 

Albuquerque real estate agent Rich Cederberg sells Albuquerque homes for sale including single family homes, townhomes and condos in the Albuquerque Metro Area for eXp Realty. Call him at (505) 803-5012.

Comments

  1. Hi Rich,
    Nice post. It teaches everyone a lesson to always do your homework or else face costly mistakes!

Speak Your Mind

*

CommentLuv badge
All content by Albuquerque Real Estate Agent Rich Cederberg, 505.803.5012, unless otherwise noted. eXp Realty, (505) 750-1846.

Some of the information contained herein has been provided by SWMLS, Inc. This information is from sources deemed reliable but not guaranteed by SWMLS, Inc. The information is for consumers' personal, non-commerical use and may not be used for any purpose other than identifying properties which consumers may be interested in purchasing.

Broker-Reciprocity

This IDX solution is (c) Diverse Solutions 2014.