All Forum Posts by: Brent Hall

Curious what other foreclosure auction buyers are paying to previous owners and tenants when you need to resort to cash for keys.

We typically budget $2500 for owners and up to 2 mos rent for tenants. If we think the previous owner might contest the sale we've budgeted up to $15,000.

You're going to get what you pay for. Why wouldn't you want to find a quality broker who understands how to invest (buy/flip/hold, whatever)? Someone who can analyze quality deals and present them to you intelligently is worth whatever their fee is, especially if it makes you $$. If the deal can't support a buy side commission for the broker, how good of a deal could it be?

The massive back log of foreclosure properties appears to be pushing through the system again at an increased rate in Cook County, IL (Chicago).

Properties sold back to the lender at foreclosure auctions increased 62% in Nov 2011 over the prev month (1789 vs. 1100 units). Through Sep 2011, the ave # units sold back to the lender on a monthly basis in Cook Cty, IL was 879.

What are lenders doing to manage this supply of REO properties that is bound for the resale market?

Are we going to see further downward pressure on pricing in 2012 and beyond?

Yep. A better title would have been "How reliable is the Case Shiller index"

While researching a property that is scheduled for foreclosure auction, I noticed a large discrepancy in the valuation given to the property by the broker (exterior BPO only), the valuation from Zillow using Zillow’s Home Value Index and what the property is worth on a technical basis when utilizing the Case Shiller Index.

The decrease in value of the property vs. the prior sale price is as follows according to the three sources:

BPO: -32%
Case Shiller: - 17%
Zillow: -47%

The BPO is comparing this property to like kind properties within a small radius. Zillow tracks valuations by zip code. Case Shiller tracks valuations by City.

Should the Case Shiller Index continue to have such a big influence on the media and residential real estate market in general?

Biggest barrier to entry and the reason many people may become interested but will NEVER buy at a trustee or judicial sale foreclosure auction = CASH.

RE: How far out to go for comps.

In my experience in Chicago, appraisers following FHA underwriting guidelines will include properties up to 2 miles away that have sold in the previous 6 months. I'm not quoting FHA guidelines here, this is just my experience.

Chicago is a city of neighborhoods (good next to bad) and though it is sometimes necessary to go up to 2 miles out to find comps, I wouldn't expect an appraiser to value all of the comps within that range equally.

Redfin.com is another decent site for those who don't have access to the MLS.

Consider contacting one or two reputable mortgage brokers in the city or region where the property is located and ask them what options an end buyer would have if they chose to go with either FHA or conventional financing.

If you buy and resell a lot of properties, you’ll eventually need a good mortgage broker who understands your business and can help you procure financing for your buyer.