Posted by: Timothy Ellis (The Tim)

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

39 responses to “Bank-Owned Sales Bounce Along Near Low”

  1. sniffy

    With inventory so low, and bank-owned sales such a small percentage…where’s all the shadow inventory I’ve heard so much about? Are banks sitting on it, or is it not really there?

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  2. Kary L. Krismer

    RE: sniffy @ 1 – IMHO, it’s not there, except in the form of banks delaying some foreclosures.

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  3. Pegasus

    RE: Kary L. Krismer @ 2 – That is why one in ten mortgages in Washington State is in default and our state was in the top ten for foreclosure starts for August and number five on a per capita basis? Remember toking up before Dec 6 is still illegal even though no one will arrest or prosecute you for doing so….

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  4. softwarengineer

    RE: Pegasus @ 3

    Com’ on Man

    The banks aren’t cooking the foreclosure books to make their balance sheets look better, they have a history of being ethical and we all should trust them. sarc….

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  5. ARDELL

    King County YTD 3,399 closed sales were Bank Owned properties of which 2,373 (70%) were single family vs condo and 544 (23%) of the single family home bank owned sales were “North of I-90″.

    Pierce County YTD 2,266 closed sales were Bank Owned properties of which 2,088 (92%) were single family homes.

    Snohomish County YTD 1,988 closed sales were Bank Owned properties of which 1,592 (80%) were single family homes. (Of note…Snohomish classifies more of it’s single family homes as condos than Pierce and King and uses a different method of making the distinction between condo and single family. So not really an apples to apples comparison there.)

    Required Disclosure: Stats in this comment are not compiled, verified or published by The Northwest Multiple Listing Service.

    Looks like plenty of bank owned sales to me. Tracking month to month vs YTD and expecting them to be spread out evenly on a monthly basis is not a good way to look at the big picture, IMO. Waiting for a bank owned home in good condition in a prime zip code that is not on a busy road or close to a freeway…likely not going to be a fruitful strategy for the next 2 to 3 years or longer.

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  6. Erik Muller

    “Waiting for a bank owned home in good condition in a prime zip code that is not on a busy road or close to a freeway…likely not going to be a fruitful strategy for the next 2 to 3 years or longer.”

    I think you are wrong. With existing foreclosures on the market and a large number of the “Notice of Trustee Sales,” I do not see why you would make this comment. This is exactly opposite of what I think is true.

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  7. ARDELL

    RE: Erik Muller @ 6

    I think that depends on what we call “prime zip code”. What I am seeing that would make you more right than me is more people with good houses who want to move simply letting them go into foreclosure without trying to sell them short first. That is likely the most recommended method by their attorney, especially if they don’t qualify for a short sale and only have one mortgage.

    I think Kary might agree with me on that, and also be the better judge of that.

    Good reason why people should always call an attorney vs an agent when they want to move and they owe more than the house will sell for. An agent will almost always recommend selling short, vs letting it go into foreclosure and become bank owned property. In my experience those who seek legal counsel, as I recommend they do, almost never get the advice to sell short vs letting it go to Trustee Sale.

    I haven’t seen a lot of good bank owned homes for sale since the market first turned and the builders got caught with their pants down. But that is likely due to the areas where I work more than overall market conditions. The areas where I work had fewer zero down loans even when those were available. So even though prices are depressed, many can still sell for more than they owe when they sell for less than they paid.

    In fact most of the foreclosures I see are due to heavy cash out refinances being the high debt vs the original purchase loan.

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  8. Erik Muller

    RE: ARDELL @ 7
    My attorney advised me to short sell and I did.

    King County Notice of Trustee Sales…..
    July 2011=731 July 2012=977
    Aug 2011=776 Aug 2012=1056
    Sep 2011=499 Sep 2012=844
    Oct 2011=376 Oct 2012=909

    I cannot comment on the semantics… I am an engineer and not a real estate agent. It appears from the data that we are heading into a good buying time. I bought a foreclosure in 98034 kirkland wa in Nov 2011 and it is a great deal. I consider it a “prime zip code.” Do you not consider that a “prime zip code.”

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  9. Kary L. Krismer

    By Erik Muller @ 6:

    “Waiting for a bank owned home in good condition in a prime zip code that is not on a busy road or close to a freeway…likely not going to be a fruitful strategy for the next 2 to 3 years or longer.”

    I think you are wrong. With existing foreclosures on the market and a large number of the “Notice of Trustee Sales,” I do not see why you would make this comment. This is exactly opposite of what I think is true.

    A large percentage of bank owned properties are in bad locations just with respect to busy roads and freeways. Throw in Ardell’s “prime zip code” limitation and there’s been very little inventory.

    Stated differently, it tends to be the least desirable houses that end up in foreclosure AND THEN bought by the bank as opposed to a third party. Yes, there are exceptions, but they tend to be the clear minority.

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  10. Kary L. Krismer

    RE: Erik Muller @ 8RE: ARDELL @ 7 – There are attorneys out there who think that short sales are great, and others who think they are a waste of time. Part of it depends on what they do. If they do short sale negotiating, they’re more likely to think they are great. If they do bankruptcy, they are more likely to think they suck. That’s part of the reason I wrote my two part piece on short sales, addressing the advantages and disadvantages of short sales. It was hard to find sources that deal with both points of view.

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  11. Erik Muller

    RE: Kary L. Krismer @ 9
    Yeah, I look for places that need work in good locations. I suppose that makes the property less desirable for lot of people and therefore fits into that category.

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  12. ARDELL

    RE: Erik Muller @ 11

    A lot of those sell at the Trustee Sale and come back as flips vs Bank Owned. I have seen several in 2012 sell at foreclosure for $230,000 to $250,000 or so and come on market as flips for $400,000 to $450,000 and sell pretty quickly in the remodeled versions.

    My favorite was at 19th and 1st East of Market, except for the restrictions because a creek ran through it. It didn’t sell as quickly for that reason, but the owner refused to drop the price and eventually did get it.

    There was another like that very recently in The Highlands. The existing structures were grandfathered, but renovating outside of the current building envelope, even to expand the deck or add a patio, not possible due to the inability to put anything permanent within 60 to 100 feet of the creek or stream. The distance plus buffer depends on the Class of stream, B or C. Be careful of fixers where the lot has water running through it. Some flippers have been surprised after the fact by those restrictions.

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  13. corndogs

    RE: Erik Muller @ 6

    Ardell said … “Waiting for a bank owned home in good condition in a prime zip code that is not on a busy road or close to a freeway…likely not going to be a fruitful strategy for the next 2 to 3 years or longer.”

    Erik Muller said… “I think you are wrong”

    Ardell is correct.

    The discount rate for picking up a Seattle foreclosure is down to less than 7% now as opposed to 20% back in 2009. So where’s the incentive to salivate over the prospects of a foreclosure at this point?… last year the discount was only 11%, so it hasn’t been that great in quite some time.

    With the current inventory at 1.7 months and still plummeting, you could triple last years foreclosure rate and still be in a sellers market… It isn’t going to make a rat sh*ts bit of difference if there is an uptick in foreclosures.

    Foreclosures are a good deal if they are terribly f-d up and you know how to fix it and have cash to buy…. that has not changed and will not change.. maybe that’s you.

    But as far as finding a great move in ready house at a deep discount, that sh*t’s over, going on about 3 years…. you’ll be competing with retiring baby boomers for years on these ideal little in city turn key bungalows.

    http://www.prnewswire.com/news-releases/foreclosure-discount-falls-to-77-percent-nationally-178079111.html

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  14. Erik Muller

    By corndogs @ 13:

    RE: Erik Muller @ 6

    “Ardell said … â��Waiting for a bank owned home in good condition in a prime zip code that is not on a busy road or close to a freewayâ�¦likely not going to be a fruitful strategy for the next 2 to 3 years or longer.â��

    Erik Muller said… “I think you are wrong”

    Ardell is correct.”

    Ouch!

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  15. Erik Muller

    RE: corndogs @ 13
    “Foreclosures are a good deal if they are terribly f-d up and you know how to fix it and have cash to buy…. that has not changed and will not change.. maybe that’s you.”

    That is me. I don’t like them terribly f’d up though. I like cosmetic fixers and I have seen those.

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  16. corndogs

    RE: Erik Muller @ 15 – good luck, that’s the trick…. find something that looks worse than it is.

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  17. Madame Defarge

    I liked reading Muller’s views on the lack of foreclosure deals, but his post contains too much cussing.

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  18. Erik Muller

    RE: Madame Defarge @ 17
    Sorry if you feel i was cussing. Corndogs used an abbreviation for a curse word, so i mirrored it. In the future i will refrain.

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  19. ARDELL

    RE: Madame Defarge @ 17

    I don’t think it’s really a “cuss” if the vowel is missing. But that’s probably because I still use an fck editor on my blog, so I don’t view fck as a cuss.

    http://richtexteditor.com/fckeditor/?gclid=CLbp34yEzbMCFSmCQgod3RgAeA

    fck is actually the correct tech name for the wysiwyg editor I use, and it has nothing to do with “cussing”, as far as I know.

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  20. corndogs

    RE: Madame Defarge @ 17 – That was me cussing, Erik seems like a very nice young man and a hard worker, hopefully he will find something and be very successful, I like him just based on his few posts…. as to your delicate sensibilities…. I’m going to be nice to you for now, because you might be a lady. but I would highly recommend that you do not read posts with the word Corndog in it unless you are prepared to receive a condescending R rated lesson of one sort or another. Corndog is not a role model.

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  21. ARDELL

    RE: corndogs @ 20

    “Corndog is not a role model.”

    Is there a place to keep awesome Seattle Bubble quotes? I nominate this one.

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  22. Pegasus

    RE: Erik Muller @ 8 – Let’s not taint the selling hype with facts…..

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  23. ARDELL

    RE: Erik Muller @ 8

    98033 is “the” prime zip code of Kirkland. 98052 would fall between 98033 and 98034 along with a few Bellevue Zip Codes. Much of Sammamish also would come before most of 98034. 98034 is for the most part the equivalent of 98011.

    98034 is to 98033 as 98125 is to 98103 and 98115. :) Personally I would put most of South Juanita 98034 before most of Rose Hill 98033, but that is not the general consensus.

    If you provide an actual address, I am willing to reconsider. :)

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  24. ARDELL

    RE: Erik Muller @ 8

    I do think we need to make a distinction between condo and single family home. Usually on SB we are not talking about condos and if you bought a condo then yes, you would be correct. As to single family…no, there weren’t any at that time. There was one recently in The Highlands, but waiting for something like that as a strategy for buying a home to live in, they just don’t come around often enough.

    Bank Owned condos I expect to continue to come in all shapes and sizes in both good neighborhoods and bad ones…with no end in sight.

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  25. Jonness

    By ARDELL @ 19:

    fck is actually the correct tech name for the wysiwyg editor I use, and it has nothing to do with “cussing”, as far as I know.

    :)

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  26. Erik Muller

    RE: ARDELL @ 23
    Ardell, this is a condo in Juanita Bay. The address is 12003 100th ave NE #203 Kirkland, Wa 98034. I am finished fixing it up minus flooring in a bedroom and decking. I would like to sell it for 180k or so. If I can leave with atleast $60k after paying agents and taxes, i figured that I can do this again with more money. On a new place, I would put $30k down and $30k for remodeling. I think with that much money, things would run smoothly and I would be able to speed things up.

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  27. Erik Muller

    By ARDELL @ 23:

    RE: Erik Muller @ 8

    “98034 is for the most part the equivalent of 98011.”

    I think 98011 is more like totem lake area. I feel Juanita is much better than those areas. From what I have heard, juanita has improved a lot in the last few years.

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  28. Erik Muller

    RE: corndogs @ 20

    Ha ha ha. That was pretty good…. “I would highly recommend that you do not read posts with the word Corndog”

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  29. ARDELL

    RE: Erik Muller @ 26

    I’m with you on that part of 98034, but the houses around the bend with view have a heck of a time selling most of the time. I don’t think short sales and foreclosures are done in goat hill, as example, just around the bend and to the right of the road all the way to St. Edwards State Park.

    I think the single family tear down over at 84th and 136th turned into a new home that is pending was a heck of a gamble, but it paid off because they kept the numbers down. Your plan sounds equally doable. I would go the extra mile and have it professionally staged given it is a 2nd floor. 1st and 3rd floors have the edge over there, but you can probably pull the same result with staging.

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  30. Pegasus

    RE: Erik Muller @ 28 – The only good advice that Cornie has ever posted here.

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  31. corndogs

    RE: Pegasus @ 30 – “The only good advice that Cornie has ever posted here.” Actually Pegasux, if you would have shorted the DOW after the 2nd debate like I told you you’d have picked up 6.5% to 13% as of today depending on which vehicle you used. You dumbass Democrat… since you are a Democrat you probably don’t have any money to invest, if you do, you probably lost money over the time period… That decision just changed my fortune by about 70K in a few weeks…. That’s how the rich get richer little buddy! All corndog predictions on this site have come true without exception..

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  32. Erik Muller

    RE: ARDELL @ 29
    It is a second floor, but it is a top floor condo with high ceilings. It is the same as a 3rd floor except 4 feet lower in elevation. It is setup a little differently than the other 2 buildings in the complex.

    Who can professionally stage my place and for how much? I have a designer that I paid $320 to for a consultation which gave me some really valuable direction. Not sure if she will stage or how much cause I haven’t gotten to that point yet. I am remodeling paycheck to paycheck and therefore don’t have much money to stage. Are there companies that will front me staging and get paid when I sell? Who are they?

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  33. ARDELL

    RE: Erik Muller @ 32

    I don’t usually use a stager as it is too expensive, often in the $2,000 to $5,000 range. Also the cost is unknown given there is a monthly rental cost for the things. I do my own “light staging” without heavy pieces, just to give the photos some interest.

    I did just get a price from Erica at http://www.stagedbyerica.com/ and will likely be using her for a townhome in the U-District, but mostly because the furniture is in the townhome in front of the one I will be listing, so I can get a huge discount for moving it 100 yards away to an almost identical property. :)

    I’m also thinking of using the photographer Tim sometimes makes fun of who puts pictures of Bogart movies on the flat screen TV. :) Usually I take the photos myself, but this is a special case. They are https://www.hdestates.com/contact and I don’t know the cost. Just sent them an email for a quote on mine but I would expect that to be $200 to $300. Cost is not the reason I usually don’t use a professional photographer.

    As to 2nd floor vs top floor, I did notice some high ceilings in the one you purchased, but not the clerestory windows in some of the 3rd floor units. Could be they just weren’t in the photos.

    I have one buyer client who might be interested if you want to give me a heads up when it’s ready before you list it. Could be “too Juanita” for them :) They have the typical Redmond near Redmond Town Center or Downtown Kirkland outlook, but at under $200,000 it could be a strong possible. I just sold a house nearby in 18 hours, so the only advantage would be to save the listing fee. But a market tested price by listing it, giving it a chance to bid up, is usually the best way to go.

    Good luck!

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  34. ARDELL

    RE: Erik Muller @ 32

    P.S. got the price quote of $269 for the 15 mls photos and The Tim will love this…FREE (fake) Blue Skies is the special running through 12/15. :)

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  35. ARDELL

    RE: The Tim @ 35

    Not unless they are subcontracting it out to Vicaso from HD. I don’t think so, but possible. The link is up in comment 33 and I noticed the black and white movie on the flat screen in their photo gallery. I didn’t take the time to study who the actors were or what the movie was. Still…I’m planning to use them for the U-District townhome listing because I want the HD look for this particular townhome. This is an odd case where I am trying to replicate the quick sale price of the nearby pending sale, which should be closed by the time I list the one behind it.

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  36. ARDELL

    RE: ARDELL @ 36

    HAHA!!! Just checked…no, not Bogey…It’s The Rat Pack!!! Perfect for me.

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  37. Erik Muller

    RE: ARDELL @ 33
    Thank you for the information. I think i’ll try to just leave it empty when I go to sell it since I don’t have any extra money right now.
    I will write down your photo person and call them when I list it. I am currently living at the residence, but I live alone and can easily pack my stuff and leave if you have someone that wants to buy it for the right price. I am always open to selling if I can make a good profit.
    My name is Erik and my phone number is 4257607500. The condo is not approved for FHA financing.

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  38. ARDELL

    RE: Erik Muller @ 38

    Got it. Will ask them and let you know either way.

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