Redfin Maps All the Bank Owned (REO) Shadow Inventory

Full disclosure: The Tim is employed by Redfin.

After Google’s recent announcement that they were pulling their real estate map features, I was somewhat disappointed that we had lost a mapped view of unlisted foreclosures. Fortunately, Redfin just today released a sweet new feature that I’ve been helping plan: Full map and details on all bank owned inventory.

While most (all?) other foreclosure search sites require you to register and/or pay just to get the actual address of bank owned homes (I’m looking at you, RealtyTrac), Redfin displays the full address, home details like beds/baths/size, and even which bank “bought” (repossessed) the home at the foreclosure auction (it’s under the “Listing Information” section as a bullet labeled “Buyer”). Click the map screenshot at right to do a live search right now.

In addition to being a valuable resource for home shoppers to keep an eye on upcoming inventory, this feature also allows us to get a nice visual of part of the “shadow inventory” problem, broken down by neighborhood.

Browsing around the Seattle area with only the purple unlisted REO icons turned on, you can see that the central Seattle/Bellevue corridor is fairly light on shadow inventory, with the problem increasing dramatically as you go further north or south. This lines up nicely with our recent analysis of on-market inventory.

Look for some detailed analysis of this data in the coming months over on the Redfin blog, as I am able to spend some time querying all this new information in our database and coming up with sweet ways to visualize it all.

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About 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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

111 comments:

  1. 1
    Fran Tarkenton says:

    Maybe its answered at redfin.com, but I didn’t see it.

    Does this cover only homes where the bank takes it back at a trustee’s sale, or does it cover all bank-owned homes, like those acquired by deed in lieu of foreclosure?

  2. 2
    Greg says:

    Is this just turned on for Seattle? I have seen this check box for awhile here in Portland, but no results show up when I look. Would love to see this to help gauge shadow inventory in the different areas we’re perusing.

  3. 3
    Jillayne says:

    This is an incredibly cool feature and one that my Realtor students have been asking for….because their buyers are asking for it! Hats off to Redfin.

    This can also be helpful for home sellers so that they can get a better understanding of what kind of shadow inventory they’re dealing with locally in order to price their home to sell.

  4. 4
    The Tim says:

    RE: Fran Tarkenton @ 1 – Good question. I’m not actually sure. I’ll find out though.

    RE: Greg @ 2 – It should be enabled in every market Redfin serves. I see plenty of results in Portland. Not sure why you aren’t seeing any.

  5. 5
    EconE says:

    It doesn’t include the homes where people *aren’t* paying their mortgage but there is no NOD filed.

  6. 6
    Pegasus says:

    Tim.. How do you know that this is the entire shadow inventory? What is the source? I don’t think this is the entire shadow inventory as banks get some homes back through means other than foreclosure like buyers walking and turning the home over to the bank in lieu of foreclosure.

  7. 7
    Pegasus says:

    By EconE @ 5:

    It doesn’t include the homes where people *aren’t* paying their mortgage but there is no NOD filed.

    That’s because the bank does not own the property(REO) yet and can not sell it because it is not their’s to sell. It is not part of their shadow inventory yet but prolly will be in another year or two.

  8. 8
    The Tim says:

    RE: EconE @ 5 – Yes, that’s why I clearly stated that it is “part of the ‘shadow inventory’ problem.” The same “part of” qualifier is on the Redfin announcement post (because I insisted they add it).

    RE: Pegasus @ 6 – See my response above to Frank. I’m not sure if it includes Deed in Lieu, but I will find out.

  9. 9
    Pegasus says:

    By The Tim @ 8:

    RE: EconE @ 5 – Yes, that’s why I clearly stated that it is “part of the ‘shadow inventory’ problem.” The same “part of” qualifier is on the Redfin announcement post (because I insisted they add it).

    RE: Pegasus @ 6 – See my response above to Frank. I’m not sure if it includes Deed in Lieu, but I will find out.

    Your headline was why I asked…”Redfin Maps ALL the Bank Owned (REO) Shadow Inventory”

  10. 10
    robotslave says:

    Three words, Tim:

    “Google Street View”

    Also, Pegasus is correct: your headline is misleading and should be corrected.

  11. 11
    goldbach says:

    I like the feature. I just have a brief comment about the UI. When mousing over an address with multiple properties, the mouse-over reads “2 units for sale”, like it does for the other listings. Technically, these units are not yet for sale.

  12. 12
    The Tim says:

    RE: robotslave @ 10 – Sheesh, jump the gun much? I said I wasn’t sure, I didn’t say that it doesn’t. As promised, I have looked into this and as it turns out, we are including homes that went back to the bank via Deed in Lieu of Foreclosure.

    I had to dig through a lot of records to find any Deeds in Lieu at all, since it seems that they are fairly rare around here (less than 5 a month in King or Pierce). Then it was tricky to find an example of one that isn’t yet MLS-listed. However, here’s one: 1221 Hillside Dr. in Carbonado. Here’s the Deed in Lieu of Foreclosure filed with Pierce County (pdf).

    So yes, Redfin is in fact displaying all the bank owned shadow inventory.

  13. 13
    Jillayne says:

    Bank-owned shadow inventory means the bank has foreclosed and is in title, but the home is not yet listed with a real estate broker. The title of the post is accurate.

    There are a LOT of other ways to define the words “shadow inventory” that don’t include already foreclosed homes.

    * Homeowners who have defaulted but a Notice of Trustee Sale has not yet been recorded.
    * Homeowners who would like to sell but are waiting for a better market
    * Rental homes and condos where the homeowner wants to sell but for whatever reason, can’t or decides not to.
    * and foreclosed homes now owned by the bank but not on the market.
    See CR for further analysis:
    http://www.calculatedriskblog.com/2010/11/shadow-inventory.html

  14. 14
    Dan says:

    Really nice feature to show the name of the bank that acquired it. Interesting to see how many are Fannie owned or are owned by a securitization trust with a random code for a name (for the truly obsessive if you google most of those you can figure out which investment bank packaged the junk though that bank likely did not originate it).

    Among the many neat graphs, charts and maps that I’m sure are going to be requested it would be interesting to see if you can get a rough data set for (i) Fannie/Freddie owned, (ii) any form of “trust” owned and (iii) others, i.e. regular ordinary banks. I’m sure that would add some interesting background and fun commentary, particularly in terms of the “walk away” discussions, when people can really start to get a sense for what the entities (they aren’t really banks) that are/were holding the worst performing mortgages really are. My guess is that very few (<5%) of the REO properties sitting out there were bought back by anything resembling a local bank or credit union that made the loan expecting to hold it on its books.

  15. 15
    softwarengineer says:

    The Map Also Tells You

    The pimples are somewhat equally dispersed throughout Seattle [only more icons where there are more houses built], no neighborhoods are special or immune.

  16. 16

    By softwarengineer @ 15:

    The Map Also Tells You

    The pimples are somewhat equally dispersed throughout Seattle [only more icons where there are more houses built], no neighborhoods are special or immune.

    Not exactly. I don’t see any single family homes in the shadow inventory of Queen Anne, Ravenna, or North Capitol Hill.
    …And it sure looks like condos were hit pretty hard all over.

  17. 17
    ChrisM says:

    RE: Greg @ 2 – Be sure to set the min price to “no min” otherwise they won’t show up.

    Tim — This is great news!!! If we add one of these “shadow inventory” properties to our favorites, will we get a notification when it hits the market?

  18. 18
    EconE says:

    RE: The Tim @ 8

    I’m seeing bank owned homes and NOD’s on RealtyTrac here in L.A. that aren’t showing up on Redfin. Is there a lag time for them to show up?

  19. 19
    TheHulk says:

    Excellent job Tim & Redfin. At least it gives us an idea of what the banks have in the pipeline.

    Sadly it doesn’t capture the real picture. It shows you the shadows, but not what’s in the shadows. As an example, my colleague who has been living rent-free in his house for over a year now. Since he purchased in 2007, in his own words “no way in hell am I paying that mortgage since I am 60K underwater and counting”. I haven’t talked to him in a couple of months, but the bank still has not foreclosed on his house. I wonder how many more there are like him.

  20. 20
    The Tim says:

    RE: ChrisM @ 17 – Yes, you should be able to favorite an unlisted REO home and as long as you’ve got the “Email me when my favorites are updated” box checked on your My Redfin Favorites page, you should get an email when it comes on-market.

    RE: EconE @ 18 – There can be some slight latency in the REO appearing on Redfin. Also, are you sure you’re only looking at REO on RealtyTrac? They show a bunch of stuff that isn’t really REO, but is “pre-foreclosure” or at some other stage in foreclosure prior to the actual repossession by the bank.

  21. 21
    softwarengineer says:

    RE: TheHulk @ 19

    Maybe the Banks Protect Certain High End Pink Pony Neighborhoods

    Like Queen Anne, Ravenna, or North Capitol Hill?

    And are harsher on the cheaper $400K areas…LOL

  22. 22
    EconE says:

    RE: The Tim @ 20

    Nope…I’m looking at both pre-foreclosure and bank owned.

    The Realestalker did a writeup today on (yet another) one of Nic Cages homes that was taken back by the bank. It shows up on RealtyTrac as bank-owned but doesn’t show up on Redfin. That’s just one example….the one that prompted me poke around some more to see that there were quite a few that weren’t showing up.

    http://realestalker.blogspot.com/2011/02/more-nic-cage-foreclosure-news.html

    http://www.zillow.com/homedetails/540-S-Rossmore-Ave-Los-Angeles-CA-90020/20775167_zpid/

  23. 23
    TheHulk says:

    RE: softwarengineer @ 21

    More likely that the unrealized losses are higher on the homes in his neighborhood (Kirkland). His house was purchased slightly north of 500K. Currently similar homes (much better condition than his, better floor plans etc are selling for 420Kish and dropping as we speak).

  24. 24
    The Tim says:

    RE: EconE @ 22 – Redfin’s data isn’t going to show any of the pre-foreclosures, only once the bank has actually repossessed the house. For the Nic Cage example it looks like the record just hasn’t come through yet on our public records data feed. I gave a quick look on the LA County assessor’s website and couldn’t find a record of the foreclosure sale there either.

  25. 25
    ray pepper says:

    I just checked 3 known Shadow Inventory Homes here in Pierce County that are not showing up..They are still listed with the Agent when it went back to bank at Trustee Sale. All are about 1-2 weeks post Trustee sale. Is this the reason its not showing up?

    Love this though! Is it working for Condo? Multifamily? Commercial?

  26. 26
    The Tim says:

    RE: ray pepper @ 25 – Send me the addresses in an email and I’ll look into it.

    [Edit: Got the email. Of the three Ray emailed me, two are still MLS-listed (and therefore won’t display as unlisted REO) and one is too new of a foreclosure. The record should show up on Redfin in a few weeks.]

  27. 27
    LocalYokel says:

    I was shocked, no delighted to see this last night. No more jumping around to realtytrac.
    Big value add of my time doing my analysis. If redfin is like Microsoft’s reviews, Tim, you
    deserve a gold star.

    One question: I noticed some shadow REO like from 2009 and unsold.
    Do the banks rent these out, allow the former owners to squat/pay rent, or keep them empty?
    I haven’t had a chance to drive by one due to the snow.

    Thanks.

  28. 28
    David Losh says:

    How does redfin handle the sales of these properties? Some can be a challenge. Some listing agents are a challenge.

    I’d like to know what it is like to buy a bank owned property in today’s market.

  29. 29
    anonimaniac says:

    Regarding comments such as no REOs in Capitol Hill, Ravenna, etc., one should note on sites like Redfin that the short sale is common now in these areas. Those stellar, immune areas. Look at the prices paid on last sale and what they are offered for now. Soon to be non-Shadow inventory. The HELOC is coming home to roost.

  30. 30
    Jonness says:

    Yawn. I’ve been using this feature forever. However, I noticed yesterday new areas were added that weren’t previously featured, and old areas were appended.

    This is not new; it’s just been upgraded. However, I was really glad to see it happen.

  31. 31
    ray pepper says:

    RE: David Losh @ 28

    Its very easy to buy a bank owned property. In fact, I find it the easiest of all deals now. Just be prepared if its priced low to get the: “please submit your highest and best offer by Friday at noon” email due to other offers coming in.

    Give me an REO everyday…Only thing easier is a Quadrant sale.

  32. 32
    YetAnotherTim says:

    I’m glad this feature has been upgraded, as I’ve seen a few non-MLS listed foreclosures on Redfin in the past. I didn’t understand why I didn’t see more or why they weren’t actually listed for sale. Now I do.

    Once again, this blog proves to be essential reading. I might’ve pulled the trigger and bought by now if not for all the data and discussion on here.

    Now I just need to decide if I should buy before October. If I do, the company I’m relocating for will cover all the closing costs. It’s a nice incentive but hardly worth even a 3% drop in value. Looks like I may remain a dirty renter with peace of mind for quite a while.

    I’ll be hitting Tim’s tip jar, either way.

  33. 33
    Lo Ball Jones says:

    It would interesting to see a map of prices for people who stopped paying their mortgage shown as the amount paid so far.

    Take for example a person buying a $300,000 home. They pay for 5 years, and then go into foreclosure and stop. The effective “cost” of the home is $60,000. Therefore, anyone would be a fool to pay $300,000 for the equivalent home next door down. The purchaser should demand to pay what the squatters paid, because that is the effective value of homes.

  34. 34
    The Tim says:

    RE: Jonness @ 30 – Yes, the part that is new and noteworthy is that the data is far more complete than it used to be. Note the headline of the Redfin announcement: “700% More Foreclosed Homes.” The big deal is not only the expanded geographical coverage but the far more comprehensive coverage in the areas we already had this feature in.

  35. 35
    NewHomeOwnerInFremont says:

    RE: David Losh @ 28 – It’s actually easy; I love it. I am in the process of setting up inspection this weekend. It’s so much better than dealing with short sales which I avoided like the plague and owners who are emotional about their homes and won’t budge much if at all in negotiating even if they are overpriced. REOs, especially today, will be the “true gems” or “steals” if you can find one (I know; it’s hard. I’ve been looking for 9 months) that does not require serious time and a lot of money. I have found a home that I thought I would never find in the neighborhood I want and that meets my budget. I will post more about my experience if inspection does not uncover anything serious that would make me pass on the property.

  36. 36
    David Losh says:

    RE: ray pepper @ 31

    You wouldn’t offer full price. The bank can say yes or no, or you can resubmit the offer.

  37. 37

    By ray pepper @ 31:

    RE: David Losh @ 28
    Its very easy to buy a bank owned property. In fact, I find it the easiest of all deals now. Just be prepared if its priced low to get the: “please submit your highest and best offer by Friday at noon” email due to other offers coming in.

    But their contracts are usually more burdensome and one-sided, meaning that you’re more likely to lose your earnest money if financing falls through. In fact, sometimes the contract calls for the earnest money to be transferred before closing. I can live with all that, but people need to be aware of it.

    I did come across one property where the bank’s documents were so bad (poorly drafted, amateurish, etc.) that my advice to the client was to walk from the property and not sign their documents. Having an attorney review them to fix them would have probably cost $2,000 or more.

  38. 38

    By Lo Ball Jones @ 33:

    It would interesting to see a map of prices for people who stopped paying their mortgage shown as the amount paid so far.

    Take for example a person buying a $300,000 home. They pay for 5 years, and then go into foreclosure and stop. The effective “cost” of the home is $60,000. Therefore, anyone would be a fool to pay $300,000 for the equivalent home next door down. The purchaser should demand to pay what the squatters paid, because that is the effective value of homes.

    That’s not how you would determine value, but in addition your numbers would be thrown off in roughly half the cases where the owner pulled equity out of their house. Many probably paid nothing to live in the house after accounting for that.

  39. 39
    ray pepper says:

    RE: Kary L. Krismer @ 37

    Kary, I have never had the problem. I assure you the banks are NOT out lookingfor the earnest money nor even seek it when Buyer fails to close for a valid reason. They do NOT want to tie up their listing. As of late the additional bank paperwork is pretty boiler-point stating in numerous detail they know nothing about the home and the purchaser is buying it AS IS.

    David, no need to resubmit offer if your clients offer stays the same. If your client wants to raise offer price, due to other offers, a simple addendum.

  40. 40

    RE: ray pepper @ 39 – I have no idea why so many agents think that fighting over an earnest money will necessarily tie up a property (this came up on Trulia recently). It doesn’t, and any buyer who tries that will probably end up paying the bank’s attorney fees and damages. Unless the buyer was in a position to close before the closing date, and didn’t close due to no fault of their own, they most likely could not legitimately file a lis pendens. And with the typical bank addendum, they probably couldn’t even file a lis pendens in that instance.

    I would agree bank paperwork is now getting somewhat standardized. The one I was talking about was probably almost 2 years ago. It was so bad I almost wrote a blog piece on it. It was a collection of about 4 documents, probably two of which were not even drafted by attorneys, but instead bank employees.

  41. 41

    RE: ray pepper @ 39 – BTW, the standard paperwork goes far beyond stating that the property is sold “as is.” It typically changes the financing provisions as well as creating an election of remedies situation rather than mere forfeiture of earnest money.

    Again, I don’t have a big problem with those provisions, but it is something a buyer should consider.

  42. 42
    Marc says:

    RE: Kary L. Krismer @ 41 – I’ve reviewed a lot of bank addendums on REO deals and there’s nothing standard about any of them. The upshot might be extremely similar but the language is entirely different from addendum to addendum.

    One thing I’m seeing more and more often is a provision whereby the buyer must agree to defend and indemnify the seller for anything that happens to the buyer or his agents while on the property. And by “agents” I’m talking common law, not just real estate agents. I think this means the buyer could get sued by his inspector if the the inspector is injured while conducting the inspection by a defect that should have been remedied or warned of by the seller (i.e., the bank). How much would that suck if your guy fell through the roof and you wound up liable for his medical bills, lost wages, etc. with no insurance to cover your liability.

  43. 43

    […] insight into the market surrounding a non-foreclosed home you are submitting an offer on – as Seattle Bubble and The SunBreak are quick to point […]

  44. 44

    RE: Marc @ 42 – Fair enough, although I have seen a couple that were identical right down the to the revision date. They were probably both either Fannie or Freddie. In the past I’ve seen the same bank have different forms, apparently dependent on the servicer.

  45. 45

    By Marc @ 42:

    I’ve reviewed a lot of bank addendums on REO deals and there’s nothing standard about any of them.

    When I read this the first time I thought you wrote “there nothing shady about any of them.” ;-)

  46. 46
    Marc says:

    Another thing I really dislike is when the agent remarks state that the “seller chooses title and escrow” and they won’t tell you who the seller wants to use. It usually ends up being an out of state escrow company that pays short shrift to Washington laws and common practice. I always list a local office anyways and then see who they insist on naming.

    Equally bad is the out of state title companies which are usually REO focused subsidiaries of one of the big title companies. LSI Title down in California is the one I see most often. They’re owned by Fidelity National Title and routinely issue title commitments under the various names of FNF’s brands (e.g., Fidelity, Chicago Title, etc.). Their customer service sucks, their response time is abominable, and they’re very difficult to work with if you want to have a correction made or an exception removed even when it’s a relatively simple matter.

    Of course, real estate agents seldom, if ever, make requests like that so they probably don’t really care one way or the other. Too bad for their buyers as they may end up with title and deed exceptions that don’t do them any favors.

  47. 47
    ray pepper says:

    RE: Marc @ 46

    Marc you will learn that when dealing with multiple offer scenarios on REO’s that the more you ROCK THE BOAT the more your clients will lose out. When there is a GEM-LIKE purchase on the line changing the Title and Escrow can harm your clients interests. Just because you choose a local T&E company does NOT guarantee any better service.

    We all list who we have a working relationship with as Title/Escrow when its not designated on the MLS. When it gets changed by YOU or fellow Agents the purchase can be at risk and you just compromised your client.

    Also…”I’ve reviewed a lot of bank addendums on REO deals and there’s nothing standard about any of them. The upshot might be extremely similar but the language is entirely different from addendum to addendum..” Absolutely disagree. Please list in detail a variety of things that you have found completely different that could jeopardize your client. I have 4 sets of REO’s counteroffers/additional forms and each and everyone is of the same boilerpoint verbage. “YOU ARE BUYING AS IS”

    What you can do for your client is place as little risk to them in the transaction as possible by placing a small earnest money deposit down. Less then 1%. Sure your Buyer won’t have “skin in the game” but I have yet to have a bank challenge a small earnest deposit. Try it..

    You and Craig boast about your services and their superiority toward that of conventional Agents. Not always in so many words, but in tone and content. I assure you that Agents who have been in the business far longer then you and Craig would provide far better representation for their clients in/re to R/E contracts.

    Sure, pay an Attorney to reread your contracts over again in/re to an REO purchase but in the end any changes you make will be quickly thrown out by the selling bank. If your Buyer does NOT want their REO on the terms given they will simply move onto the next Buyer or drop the price until the next person comes along.

    Attorney’s practicing residential real estate, during these times, I would question all day long. So please both you and Craig try and refrain from your slamming of the 38k agents. We know 30k are buffoons. But, the same goes in your practice, maybe more.

    How do you know you have an an Ivy league Grad?
    They tell you they are…………

  48. 48
    Ross says:

    By Marc @ 46:

    Another thing I really dislike is when the agent remarks state that the “seller chooses title and escrow” and they won’t tell you who the seller wants to use. It usually ends up being an out of state escrow company that pays short shrift to Washington laws and common practice. I always list a local office anyways and then see who they insist on naming.

    It’s a violation of RESPA section 9 for seller to make their choice of title a condition of sale:

    “(a) No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property, that title insurance covering the property be purchased by the buyer from any particular title company.”

    “(b) Any seller who violates the provisions of subsection (a) of this section shall be liable to the buyer in an amount equal to three times all charges made for such title insurance. 12 U.S.C. § 2608.”

    In practice, I think some title companies have problems dealing with foreclosed properties, which may significantly extend closing time or may botch a sale. On the other hand, as a buyer you don’t want the seller to get kickbacks for choosing a particular title company or worse – some special title coverage that doesn’t cover some sort of foreclosure related loss. So long as its a major title company, you’d probably be ok. If the seller is requiring you to use some mom and pop title company, then I would run. Of course, as you mentioned, if they don’t specify this up front, you may be too committed to the transaction to back out.

    Anyways, there should be many cases where foreclosure buyers can easily go after the seller for 3x damages for Respa section 9 violations.

  49. 49
    Ross says:

    By Ross @ 48:

    By Marc @ 46:

    Another thing I really dislike is when the agent remarks state that the “seller chooses title and escrow” and they won’t tell you who the seller wants to use. It usually ends up being an out of state escrow company that pays short shrift to Washington laws and common practice. I always list a local office anyways and then see who they insist on naming.

    It’s a violation of RESPA section 9 for seller to make their choice of title a condition of sale:

    “(a) No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property, that title insurance covering the property be purchased by the buyer from any particular title company.”

    “(b) Any seller who violates the provisions of subsection (a) of this section shall be liable to the buyer in an amount equal to three times all charges made for such title insurance. 12 U.S.C. § 2608.”

    In practice, I think some title companies have problems dealing with foreclosed properties, which may significantly extend closing time or may botch a sale. On the other hand, as a buyer you don’t want the seller to get kickbacks for choosing a particular title company or worse – some special title coverage that doesn’t cover some sort of foreclosure related loss. So long as its a major title company, you’d probably be ok. If the seller is requiring you to use some mom and pop title company, then I would run. Of course, as you mentioned, if they don’t specify this up front, you may be too committed to the transaction to back out.

    Anyways, there should be many cases where foreclosure buyers can easily go after the seller for 3x of title insurance costs for Respa section 9 violations.

  50. 50

    By Marc @ 46:

    Another thing I really dislike is when the agent remarks state that the “seller chooses title and escrow” and they won’t tell you who the seller wants to use.

    We had a really bad escrow experience on a bank owned. It should have been a very easy escrow transaction because our client was a cash buyer, and there was obviously no payoff on an existing mortgage. Fortunately I knew someone high up in the company who could get things straightened out. I had to contact them when it seemed like the escrow was aiming to try to not close on time.

  51. 51

    RE: ray pepper @ 47 – First, the “as is” language is hardly the only language you need to focus on when buying a bank owned.

    Second, a client is much better off with an attorney in such transaction so that the attorney can explain the additional risk. I would agree that trying to change it would be counterproductive, but at a minimum a client should understand.

    Third, again, it is unlikely your client’s exposure is limited to their earnest money amount on a bank owned property.

  52. 52
    David Losh says:

    RE: ray pepper @ 47

    Multiple offer bank owned properties don’t sound like a Gem.

    The language of a bank contract puts the burden on the buyer. I for one would insist on a reputable title company, and escrow agent.

    Bank owned properties are a problem waiting for discovery.

  53. 53
    David Losh says:

    My ultimate question is why would redfin track these homes for publication? What is the redfin policy, and procedure for writing, submitting, and negotiating the contract?

    I agree that bank owned properties can be a mine field, but I don’t know what today’s market is for them.

  54. 54
    ray pepper says:

    I will say it again in all due respect to everyone. An REO purchase is far and away the least difficult transaction to close.

    The only difficulty is that REO’s are typically the BEST priced homes on the market and your clients offer can meet other offers thus resulting in a highest and best scenario.

    “I agree that bank owned properties can be a mine field, but I don’t know what today’s market is for them”…What????????

    “Second, a client is much better off with an attorney in such transaction so that the attorney can explain the additional risk”..I disagree

  55. 55
    Marc says:

    RE: ray pepper @ 47 – Ray,

    You don’t owe the duty of care that I do to my clients. Your clients also apparently have far lower expectations of you than mine do of me. As Kary suggested, my clients like to understand what they’re signing before they sign it. And I take the time to explain it to them.

    I’m curious, do you think only real estate agents can figure out that a small earnest money deposit can mitigate the risk of a an oppressive contract of adhesion? Do you know what a contract of adhesion is Ray? As Kary pointed out, a contract can put more than just earnest money at stake.

    In any event, just because I don’t like something doesn’t mean I don’t know how to work around it to my client’s benefit.

  56. 56
    Marc says:

    RE: Ross @ 48 – Ross,

    You’re correct, however, most clients aren’t willing to pay attorney’s fees to chase what is likely to be a very modest recovery even when trebled (nor do I blame them). An owner’s policy on a median King County home is gonna run around a $1,000 and the lender’s policy is what, another five or six hundred? Even when trebled it’s usually not worth the hassle and I don’t know many attorneys chomping at the bit to take that on contingency.

  57. 57
    David Losh says:

    RE: ray pepper @ 54

    Once again you are going out on a limb.

    The way I’m looking at bank owned properties is another system of sales where the Real Estate agent is telling people to jump on a hot deal. That sense of urgency builds.

    In the process there may be things that get over looked. Banks are thieves. I would never tell a client a bank addendum is boiler plate. If the bank directs escrow they are getting what is cheapest for them. The title report, and policy should be what is in the buyer’s best interest.

    What I don’t know is how many people are really wanting to take the risks of buying bank owned in today’s market. If they are taking the risk, then yes, they would need prudent support.

  58. 58

    By Marc @ 55:

    You don’t owe the duty of care that I do to my clients. Your clients also apparently have far lower expectations of you than mine do of me.

    Marc, I think he does owe the same duty of care. If an agent commits malpractice regarding forms, I think the standard is that of an attorney, not some lower standard applicable to an agent. What Ray cannot do is explain the forms to the same extent as an attorney.

    Also, that second sentence reminds me too much of Ardell. Not nice! ;-)

  59. 59

    RE: David Losh @ 57 – You’re correct that the bank’s addendum is not boilerplate. As I’ve mentioned, they often have election of remedies rather than mere forfeiture of earnest money. Fannie Mae also has provision that allows them to unilaterally extend the closing date in a number of situations, but they can also just cancel the agreement and return the earnest money as the buyer’s sole remedy. So the buyer merely gets their own money back for a seller’s breach! The bank has every remedy if the buyer breaches, but the buyer only gets put even if the bank breaches. And as bank contracts go, the Fannie addendum isn’t that bad.

    On the other hand, the pricing of bank owned properties at some point becomes very good. Often it’s high initially, but they typically work the price down to a point where it becomes good. So what a buyer needs to do is balance the increased risk with the price.

  60. 60
    ray pepper says:

    RE: Marc @ 55

    Marc, if I may be so bold. The Agents at 500 Realty understand contract law far above what you and Craig could ever offer a client. You see Marc, 500 Realty is all investors. We place our money on the line each and every week at the Trustee Sales. Nobody takes care of their own money better then ourselves. We choose our clients very carefully and distribute the rest back to Redfin, Findwell, Shop Prop and even WaLaw.

    There is absolutely no way that ANY Brokerage can better represent a client then 500 Realty because you and everyone else need clients to close for you to make money. Whenever there is a golden carrot to be claimed at the end of a transaction it will be skewed to favor those who reep the rewards for a client making a certain decision. We make our money and lose our money at The Trustee Sales and REO purchases in different states each and every month.

    We know contract law better then anyone and I assure you that if we decide to take you on as a client someday you will not only be Thankful you will wonder why do we do it for so little money. I will remind you as I do everyone. 500 Realty is a gift for some. We decide who we want to represent and send others to the higher risk “golden carrot” outfits such as WALAW.

    I have very little respect for Attorney’s especially ones that choose to engage in residential real estate as a source of revenue. I even further disrespect any person who business who continuously denegrates others who enage in a similar field of work. As an RN and working with many Doctors in the past I question everyone. Real estate Attorney’s peddling real estate remind me of podiatrists. Get an education in Law and then sell Real Estate or take care of feet?

    There is something very unsettling about both you and Craig, and someday it will most assuredly be exposed but for now I still question the denegrating tone you have toward others. Are your student loans, strategic defaults, causing undue financial pressure? If so I have many financial planners that could assist…

    Lastly, Yes I can answer any question you have about contract of adhesion. But, do you really wanna go there? Do you truly know who you are challenging in a question and answer game of intellectual contract law. You simply do NOT have a chance against myself and much less our partners.

  61. 61

    By ray pepper @ 60:

    RE: Marc @ 55

    Marc, if I may be so bold. The Agents at 500 Realty understand contract law far above what you and Craig could ever offer a client. You see Marc, 500 Realty is all investors.

    Ray, that is complete fantasy.

    Back in my bankruptcy days I was talking to a factor (someone offering lending based on accounts receivable as collateral). They were one of the biggest factors locally. In talking to them I quickly understood they didn’t have a clue as to the legal ramifications of what they were doing. They were just lucky that they were repaid in many cases.

    Also, I’ve seen some successful real estate investors (who shall also go nameless) that also have been lucky, and also didn’t really understand the legal ramifications of what they have been doing.

  62. 62
    David Losh says:

    RE: ray pepper @ 60

    While I appreciate what you are saying you should be careful about making broad statements.

    I have used a Real Estate attorney for many years, more than twenty, because of one contract I wrote that damaged me. My feelings for using an attorney were reaffirmed years later on a purchase I made that became a stupid hassle because of a few, very few words.

    If you guys want to take the risks you are taking that is a choice you make. Representing others based on personal experience is something different.

  63. 63
    ray pepper says:

    RE: Kary L. Krismer @ 61

    Kary and David hiring an Attorney doesn’t guarantee you anything nor it will offer you a “higher standard of care”. It all comes down to the person. There are great Doctors and lousy. Horrible Agents and Great. Absolutely worthless Attorneys and good ones.

    Due diligence always my friends. You can be equally damaged by the tag team of Marc and Craig as you could by any Agent. David if you needed an Attorney because of a mistake YOU made then you were careless and deserved it or were practicing outside your scope of practice.

    Kary, investors lose money and make money. At 500 Realty we have never lost because of contract law. We have lost because of a sheer collapse in the real estate industry and property values tanking. However, we have bounced right back by shifting gears 3 years ago and adjusting our investments to the new rules and guidelines we must play by.

    In 16 years I have never personally engaged an Attorney for anything other then my Will and an auto accident. Nobody can take care of my interests better then myself. If I begin to make errors in real estate or health care then I will gladly hang up my licenses for the better good of society.

  64. 64

    Anybody else kind of enjoying this lawyer vs real estate agent flame war?
    I mean,c’mon, aren’t we talking about the two occupations with amongst the lowest reputations out there?
    They didn’t invent lawyer jokes for no reason. And real estate agents are often equated to used car salesmen.

  65. 65

    RE: ray pepper @ 63 – This is another example of “you don’t know what you don’t know.” You might find ignorance bliss, but that doesn’t mean it’s the best strategy.

    Back when I started doing real estate people would often ask me how I liked it. My answer was that it was more stressful to me than other agents because I was aware of all the things that could possibly go wrong on every transaction. Things the average agent wouldn’t even know about, and thus not worry about. There are almost always potential issues, but they seldom become issues because both sides want the same thing–a closed transaction.

  66. 66

    RE: Ira Sacharoff @ 64 – I should complete the trifecta by going into used car sales!

  67. 67
    David Losh says:

    RE: ray pepper @ 63

    It was a mistake I made. There again if an attorney had made the same mistake they would have to defend the contract.

    You are in another world, that I would caution any one about. Using an attorney helps in many cases that are way too numerous to recount here in blog comments. You should explore it, because there are good Real Estate attorneys who are interested in being a benefit to the community.

  68. 68
    softwarengineer says:

    RE: ray pepper @ 63

    Legal Results are Like Las Vegas

    Walking into a trial is like spinning the roulette wheel.

    You can hire an attorney to attend to an i.e., iron clad trust fund, then have a State judge during a bad recession null and void the whole thing so the State can grab all the money anyway…..do I recommend legal without an attorney? Ussually not, but when it takes a Frankenstein against the judge to win, an attorney can’t do it [they have to face that judge another day] and an honest one will tell you representing yourself in that case ups the odds. If you do need to represent yourself, get an attorney as a coach and to draw up the final papers.

  69. 69
    Snigliastic says:

    RE: Kary L. Krismer @ 66 – I think selling yellow book ads would work, too.

  70. 70
    One Eyed Man says:

    RE: Ira Sacharoff @ 64

    This is just another wiener war. And just for the record (if Scotsman’s reading from the Bay area) thats a comment on juvenile machismo competitiveness and not prurient sexuality. Its about male ego rather than id.

    But as long as we’re on the subject, I guess I’ll get my 2 cents worth in (or my 2 inches as the case may be). Being a broker is being licensed to fill in the blanks on a form that an attorney drafted. Its the difference between being licensed to drive a car and being licensed to build one. Kind of the difference between being a chauffeur and an engineer.

    With that said, real estate brokers are more specialized and often know a whole lot more about the limited area they have expertise in than most real estate lawyers. But even so, If I wanted to brag, I’d brag about the JD and the LLM after my name, not C-R-S, K-E-Y or M-O-U-S-E or any of those other realtor acronyms. Bragging about being a broker is kind of like bragging you don’t have a brown streak in your underware. Its a pretty low bar to get over.

  71. 71

    By One Eyed Man @ 70:

    RE: Ira Sacharoff @ 64

    This is just another wiener war. And just for the record (if Scotsman’s reading from the Bay area) thats a comment on juvenile machismo competitiveness and not prurient sexuality. Its about male ego rather than id.

    But as long as we’re on the subject, I guess I’ll get my 2 cents worth in (or my 2 inches as the case may be). Being a broker is being licensed to fill in the blanks on a form that an attorney drafted. Its the difference between being licensed to drive a car and being licensed to build one. Kind of the difference between being a chauffeur and an engineer.

    With that said, real estate brokers are more specialized and often know a whole lot more about the limited area they have expertise in than most real estate lawyers. But even so, If I wanted to brag, I’d brag about the JD and the LLM after my name, not C-R-S, K-E-Y or M-O-U-S-E or any of those other realtor acronyms. Bragging about being a broker is kind of like bragging you don’t have a brown streak in your underware. Its a pretty low bar to get over.

    Whaddya mean? Don’t new real estate brokers have to be high school graduates?

    Real estate broker: I don’t have brown streaks in my underwear. Maybe a few yellow streaks, but no brown streaks. And yellow is the new black. Would you like to buy my underwear? Underwear never goes down in value.

    Lawyer: I may or may not have brown streaks in my underwear, but were that supposition true and I did indeed have brown streaks in my underwear, then those brown streaks would not contain even the faintest odor of fecal matter.

  72. 72
    One Eyed Man says:

    RE: Ira Sacharoff @ 71

    So, how much do ya want for the shorts?

  73. 73
    ray pepper says:

    Yes, a very comical exchange.

    But, if I may……………

    “You are in another world, that I would caution any one about. Using an attorney helps in many cases that are way too numerous to recount here in blog comments. You should explore it, because there are good Real Estate attorneys who are interested in being a benefit to the community.”

    I agree I’m in another world. My wife reminds me everyday. But, David why would I want to explore a world of good Real Estate attorneys. We have 3 or 4 loaded on the website. My friends are attorneys. They are good people with wonderful kids. Do I need their services? Do I need their bill?

    When the time comes that my error is uncorrectable by myself and the consequences outweigh my legal costs I will surely seek counsel. Until then keep hiring Attorney’s everyone . Lord knows they need your money far more then YOU need it. Talk about a GLUT in a profession.

  74. 74
    Jonness says:

    All of the purple icons represent homes the banks have foreclosed on but have not yet listed for sale. Can these homes be purchased directly from the banks prior to being listed on the MLS?

  75. 75
    Jonness says:

    By One Eyed Man @ 70:

    Being a broker is being licensed to fill in the blanks on a form that an attorney drafted. Its the difference between being licensed to drive a car and being licensed to build one. Kind of the difference between being a chauffeur and an engineer.

    My dad can beat up your dad. How on earth can a couple of years of law school compete with that? :)

  76. 76
    Kary L. Krismer says:

    By softwarengineer @ 68:Legal Results are Like Las Vegas

    Walking into a trial is like spinning the roulette wheel.

    Which is why I often say that if you end up in litigation you’ve already lost.

  77. 77
    Kary L. Krismer says:

    By One Eyed Man @ 70:

    Being a broker is being licensed to fill in the blanks on a form that an attorney drafted. Its the difference between being licensed to drive a car and being licensed to build one. Kind of the difference between being a chauffeur and an engineer.

    The difference is the attorney is more likely to understand the sentence once the blank is filled in. And much more likely to understand the entire contract, as is evidenced by Ray thinking that the bank addendum just says the property is sold “as-is.”

  78. 78
    David Losh says:

    RE: Jonness @ 74RE: ray pepper @ 73

    I did expect a response about why redfin would list these homes, and what the policy is for a purchase of these homes.

    All properties are for sale. Any properties in a banks control are for sale. There may have been some right to redemption in the past, but who would want to.

    My over all take is that buying, or owning a home may be something people would really have to think about. This will shrink the buyer pool considerably. This will also add greatly to the rental property inventory.

    What happened is we over built. We over built everywhere. What didn’t get built in the past is still set for development. If we have an increasing population like in Europe, by immigration, great, but we don’t. Even if people come here, they will come here for work, not to buy homes.

    So giving a bank anywhere close to asking price would be foolish, and yes you would want an attorney to make the bank squeal like the pigs that they are.

  79. 79
    The Tim says:

    By David Losh @ 78:

    I did expect a response about why redfin would list these homes, and what the policy is for a purchase of these homes.

    The purpose of showing them is the same reason Redfin shows FSBO: They want to display as many homes as possible to all home shoppers.

    Redfin doesn’t provide service for unlisted foreclosures or FSBO. Read more about it on their site.

  80. 80
    ray pepper says:

    RE: Kary L. Krismer @ 77

    Kary when was the last time you have seen a bank addendum supplied after mutual agreement between buyer and seller on an REO?. You readily admit you are not up-to-date and seem to reference “in my past.” The verbage that is countered to all Buyers in an REO clearly states that the Buyer is assuming all defects,boundaries,codes,etc. and that the bank has no knowledge of…………..

    Kary, I think you are not up-to-date with what is going on inregard to current REO, Short Sales, and Trustee Sales. If I’m wrong please tell me how many you have closed as of late. But, more importantly tell me what you derive from the REO verbage that could cause additional harm to my Buyers above the purchasing AS IS where IS clauses….inspections..septic…sewer…well…irrigation…etc

    Please bring something to the table and tell me which lender you are quoting so I can pull the forms for us to review.

    We will take careful note and pass on your hopefully not dated legal wisdom to our Buyers…

  81. 81
    ray pepper says:

    RE: David Losh @ 78

    “So giving a bank anywhere close to asking price would be foolish”

    David normally I would agree with you but as of late in Sacramento, Reno, Salem, and Albany we have noted banks have been drop gapping their prices to costs that are far less then to build. The regional banks want them off their books and they sell in less then 3 days when this occurs. Offering less is futile. Locally watching what Sterling (STSA) has been doing with their inventory is a key one to watch but you must be quick and have funds ready to move.

    I suspect there should be another 3 years worth of these but they ALL get gobbled up very fast.

  82. 82
    Kary L. Krismer says:

    By ray pepper @ 80:

    RE: Kary L. Krismer @ 77

    Kary when was the last time you have seen a bank addendum supplied after mutual agreement between buyer and seller on an REO?. You readily admit you are not up-to-date and seem to reference “in my past.” .

    First, the bank addendum is not supplied after “mutual agreement.” Until the buyer agrees to the addendum, there is no agreement because of the obvious fact that until the addendum is supplied the buyer probably doesn’t know what the addendum will provide. Very seldom is the addendum provided as an attached document to the listing.

    Second, the “in my past” comment did not pertain to bank sales, but instead specifically applied to accounts receivable factors not understanding the legal world they were operating in. I brought it up as a comparison to you, who also do not understand the legal world you are operating in.

  83. 83
    Kary L. Krismer says:

    By ray pepper @ 80:

    But, more importantly tell me what you derive from the REO verbage that could cause additional harm to my Buyers above the purchasing AS IS where IS clauses….inspections..septic…sewer…well…irrigation…etc.

    Okay, just as an example, the personal property provisions of bank owned are usually completely different than the standard NWMLS forms, the latter of which provide that anything left is included in the sale, which means the buyer can dispose of the material left without regard to the ownership rights of others. I’ll leave it to you to determine what the buyer can do with material left in a bank owned, because I don’t want to be providing legal advice on an Internet forum. But I will again note that the bank addendum almost undoubtely has a clause which says it controls over other provisions, so checking Form 22D’s provisions on personal property does not accomplish anything.

  84. 84
    Ray Pepper says:

    So Kary…You have nothing do you? Are you essentially bringing nothing to the table for our beloved Seattle Bubble Head readers? Have you closed any? Can you tell us any risks
    as a former or retired Attorney that Buyers need to be aware of? How about just one?

    “Very seldom is the addendum provided as an attached document to the listing.” this is incorrect.. very often it is…

    “First, the bank addendum is not supplied after “mutual agreement” This is obvious Kary….Bring somethimng to the table…..Bring me something that will make me say…”oh My!…..now your onto something!…..I never thought of that..!! .Any good attorney should be able to make me say that at least once….Don’t you agree?

  85. 85
    ray pepper says:

    Okay, just as an example, the personal property provisions of bank owned are usually completely different than the standard NWMLS forms ***old news***and quite obvious..

    Ok Kary, in all honesty I have never closed an REO where personal belongings are still left in the home that have any value. As we all know the REO can take a VERY VERY long time. When the day comes that we purchase or I have a Buyer close on an REO that was not previously listed somewhere and I have no ability to find or locate the previous owners from NWMLS records or neighbors then YES, this could present a problem.

    Not good enough for me Kary…next….

  86. 86
    Ray Pepper says:

    Tim, when I click edit..I get “Ajax Comments” and cant do anything…Also I have to reload my name , email address on each post…and why when editing does my screen bounce around like a ball..Is my new lap Top crap or is setting off?

  87. 87
    Kary L. Krismer says:

    By ray pepper @ 85:Ok Kary, in all honesty I have never closed an REO where personal belongings are still left in the home that have any value. .

    – So you’ve never closed an REO home where the refrigerator, washer/dryer, stove was left? Where there were drapes?

    Do you have any idea what personal property is?

  88. 88
    Kary L. Krismer says:

    By Ray Pepper @ 84:

    “Very seldom is the addendum provided as an attached document to the listing.” this is incorrect.. very often it is…

    I don’t want to get involved in definitions of very seldom or very often, but I just checked Kent bank owned properties over 200k, and of the 33 less than 10 purported to have REO documents attached where it wasn’t obvious from the description it was something other than the bank’s addendum. When it wasn’t obvious, I checked a few and only a couple had the addendum. So maybe 5 or 6 out of 33 had the addendum attached.

    That said, if you are dealing with a Fannie or Freddie property you probably have a pretty good idea what it will provide. Even so, the buyer has not agreed to the terms until the document is provided and the buyer has signed off on it.

  89. 89
    Kary L. Krismer says:

    RE: Ray Pepper @ 86 – Just be thankful you get an edit button. There are other comments in the weekend thread about the website. Please let Tim know what browser you are using.

  90. 90
    ray pepper says:

    RE: Kary L. Krismer @ 87

    Do you have any idea what personal property is?….Come on now Kary? You know me..I’m all knowing…I know you can pitch me something better then that…

    Give me something of SUBSTANCE! Marc? Craig?…..and Yes, Kary there was an old fridge that was left in the basement of a property in Ballard that closed now when I think about it. It was listed on the NWMLS as a short sale but had a tenant living in the property. The attempts at contact were futile from what I recall . New owner was advised to take a photo of it and document its existence.

  91. 91
    Kary L. Krismer says:

    RE: ray pepper @ 90 – Okay, again Fannie: “The Purchaser shall ensure that the lender selected by the Purchaser to finance the sale shall fund the settlement agent as of the Settlement Date. The Purchase shall further ensure that the selected lender shall provide all lender prepared closing documentation to the settlement agent no later than 48 hours prior to the Settlement Date. Any delays in closing as a result of the Purchaser’s selected lender shall be the responsibility of the Purchaser.”

    I’ve searched the form to see if they have the per diem clause that some do for delays, but didn’t find one. Assuming it’s not there, and no other clauses are present that would apply, it’s possible the forfeiture of earnest money provision would control, which is considerably different than what occurs under the standard NWMLS forms.

  92. 92
    The Tim says:

    RE: Ray Pepper @ 86 – As I mentioned in the Weekend Open Thread, I ran a major site update yesterday. Kary’s mentioned the empty form and broken edit button as well. I’ll look into it and post updates over there.

  93. 93
    ray pepper says:

    RE: Kary L. Krismer @ 91

    A year ago we used to see a per diem clause but those have since gone away as of late. So again, the risk of loss of earnest money if Buyers lender does NOT close on time comes up again. I will say this. We had a few REO’s that have not closed on time in Washington and Nevada. the last thing the bank wanted was the earnest money. What they did want is what every seller wants. “Please provide a specific and accurate date, provided by your lender, of updated closing date for review.”

    As a Buyer this could be lined out but I assure you the bank will not accept this agreement if done. In their eyes they are giving a property away at substantial savings to the Buyer. I again stress that limiting potential loss to your client in ANY transaction involving (representing the Buyer)you submit earnest money at less then 1%. We typically do .5%. The banks have yet to question this very low earnest money deposit. If we got into a highest and best with other offers then I’m sure our low desposit would be reevaluated by the selling bank.

  94. 94
    Kary L. Krismer says:

    By ray pepper @ 93:

    As a Buyer this could be lined out but I assure you the bank will not accept this agreement if done. In their eyes they are giving a property away at substantial savings to the Buyer. I again stress that limiting potential loss to your client in ANY transaction involving (representing the Buyer)you submit earnest money at less then 1%. We typically do .5%. The banks have yet to question this very low earnest money deposit. If we got into a highest and best with other offers then I’m sure our low desposit would be reevaluated by the selling bank.

    That’s probably because the same form provides: “In the event of the Purchaser’s default, material breach . . ., the Seller, at its option, may retain the earnest money deposit . . . as liquidated damages and/or invoke any other remedy available to Seller at law and/or equity and the Seller is automatically released from the obligation to sell the Property to the Purchaser. . ..”

    In other words, the low earnest money doesn’t necessarily protect you.

  95. 95
    Kary L. Krismer says:

    BTW, to be clear I agree that it’s probably worth the risk given the price. It’s just that to assess that you need to understand the risk.

  96. 96
    Fran Tarkenton says:

    By ray pepper @ 90:

    RE: Kary L. Krismer @ 87

    Do you have any idea what personal property is?….Come on now Kary? You know me..I’m all knowing…I know you can pitch me something better then that…

    Perhaps he asked that because you listed items are more commonly considered fixtures than personal property.

  97. 97
    Fran Tarkenton says:

    And now I need an edit button on Safari 5.0.3. *”…items that are…”

    By Fran Tarkenton @ 96:

    By ray pepper @ 90:

    RE: Kary L. Krismer @ 87

    Do you have any idea what personal property is?….Come on now Kary? You know me..I’m all knowing…I know you can pitch me something better then that…

    Perhaps he asked that because you listed items are more commonly considered fixtures than personal property.

  98. 98
    Kary L. Krismer says:

    RE: Fran Tarkenton @ 96 – Refrigerators, stoves and washer/dryers are not typically fixtures in the legal sense.

  99. 99
    Jonness says:

    The title of this thread is off topic. Tim, you should change it to “Agent wars.”

    So if I want to purchase a home represented by a purple icon, how would I go about it?

    P.S. Edit feature working properly now in Firefox and set to 15 minutes.

  100. 100
    David Losh says:

    RE: ray pepper @ 81RE: The Tim @ 79

    On the redfin link, which I appreciate because I couldn’t find it, it says offers are at like 97% of asking price in Seattle, 102% in Southern California. Ray is saying to make your best full price offer.

    That all makes sense except this post is showing shadow inventory. Would you be making those same offers if all the properties were on the market today? No.

    This is what bothers me about the Real Estate market place. It seems prices are poised to drop a lot further than I would have ever thought. Each week that goes by there is more news about an unsustainable economy.

    So, like with the Sterling Savings, and Loan properties, how many of them are foreclosures from the time Sterling was offering the hot deal of 4% interest and buyers were jumping on that?

    I’m nervous as long as buyers keep jumping at stuff. It seems that the stuff they jump at today will be the foreclosures of the future.

    More importantly REOs don’t have the benefit of a Form 17. Even with an inspection you don’t have any working knowledge of the property. You are going into a blind transaction, yet paying full price. Just because you say that REOs sell for less, doesn’t change that they are becoming the new market place.

  101. 101
    ray pepper says:

    “Ray is saying to make your best full price offer.”

    Good God! Did I say that? I don’t think so. I believe I said in certain areas regionals are drop gapping their prices and these homes sell very quickly with multiple offers.

    When you see a drop gap in price David you will know why everyone piles in. Until you see that you NEVER offer full price..

  102. 102
    David Losh says:

    RE: ray pepper @ 101

    Yeah you did say that. What I said is that people would be foolish to pay full price for an REO. Now you’re saying, like all Real Estate agents do, that you wait until the seller decides to lower the price, and then all pile on. That’s not in the buyers best interest.

    My point is, like in all Real Estate, you make offers that make sense for the buyer. You don’t wait around until the seller is directing the sale.

  103. 103
    Kary L. Krismer says:

    RE: David Losh @ 102 – David, some banks act strange. I once had a bank reject an offer without a counter and then within a week lower the price to within $5,000 of my offer. They apparently expect you to tell the truth when they ask for your highest and best offer! ;-)

  104. 104
    ray pepper says:

    RE: David Losh @ 102

    Oh, I see the problem now David. You don’t know what drop gapping is of a price..I’m sorry.

    If a home is listed at 200k and you offer 120k the bank will ALWAYS reject if its an REO and you will get no response. However, if this same home drop gaps to 125k 2 months later (for whatever reason) then offering less then NEW sales price is a complete waste of time. Other offers will pile in. It happens over and over and over. When a homes ” # comes up and they decide to unload” you must be ready with cash.

    You have taken yourself out of the game and its truly unfortunate because buying/selling now is the most lucrative it has ever been and I suspect in about 1 more year it will get even better. “Keep your powder dry Ray” – I’m told week after week from the people with the REAL money. So I do….Well, not really bought 3 in the last year–35k,130k,63k…..Homes 5 years ago were 145k,265k,and 275k respectively.

    Its time to build yourself a portfolio David that could last a lifetime and many will retire off this last year and the next couple years to come off pure GEM investments.

    “You don’t wait around until the seller is directing the sale”…very very wrong David…We ALWAYS wait around until the seller MUST sell. Its the only way.

  105. 105
    LA Relo says:

    Glad to see Redfin getting up to speed on this.

    Here’s my question. Say I go on Redfin now, find an REO not on the market and I go check it out. Drive by, peak in the windows, whatever.

    Now I want to buy it. I don’t need an agent, lawyer, car salesman, or witch doctor.

    I want to call the bank, and buy the property with cash down and finance through them if I don’t have all cash.

    I’d like a title check and inspection, but chances are as an REO title is clean, and you get what you get as far as condition.

    First question is who is the bank? Then, who do i talk to at the bank? Then what?

    I guess I’m wondering why a bank would want to screw around with an agent if I’m here ready to buy it now.

  106. 106
    Marc says:

    RE: Kary L. Krismer @ 58

    “If an agent commits malpractice regarding forms, I think the standard is that of an attorney, not some lower standard applicable to an agent.”

    Kary,

    That occurred to me Friday evening as I was driving home and I thought about commenting again on it. However, I’m not his attorney so I’m not going to do him any favors. I also realized that my primary mistake was engaging with Ray in the first place.

    I hope for his sake and that of his clients that he never steers anybody wrong. If any of his clients are reading these comments I recommend saving a copy of his comments in post 60. His claim to know “contract law better then anyone” might be helpful in a legal malpractice lawsuit.

  107. 107
    Marc says:

    Good stuff Ira. Keep’em coming.

    By Ira Sacharoff @ 71:

    By One Eyed Man @ 70:

    RE: Ira Sacharoff @ 64

    Whaddya mean? Don’t new real estate brokers have to be high school graduates?

    Real estate broker: I don’t have brown streaks in my underwear. Maybe a few yellow streaks, but no brown streaks. And yellow is the new black. Would you like to buy my underwear? Underwear never goes down in value.

    Lawyer: I may or may not have brown streaks in my underwear, but were that supposition true and I did indeed have brown streaks in my underwear, then those brown streaks would not contain even the faintest odor of fecal matter.

  108. 108
    David Losh says:

    RE: ray pepper @ 104

    I understand, and i’ll get to that in the next comment.

  109. 109
    David Losh says:

    RE: LA Relo @ 105

    It’s not what you know it’s who you know. You can find the bank, and the department that has the sale. They don’t want to deal with you. You are a problem.

    What you want to be is a solution. You want to be the person who moves that file, so you have to find who has the file. It can be anywhere, but one person is going to handle that sale.

    It might be the day that file is on top of the pile, it may be buried. What are you offering that will make that person check the file you want rather than close another one?

    If you’re an agent, you may be able to close more than one file. If you just want to mess around, well the person with the file has other files to close, that day.

    It’s actually a people business like any other Real Estate. There are people who work in that world, some for an entire career.

  110. 110
  111. 111
    ray pepper says:

    RE: Marc @ 106

    ” I also realized that my primary mistake was engaging with Ray in the first place.”

    This is true Marc. Your swimming with sharks in the world of blogging. Your a new guppy that will get eaten alive when you continue to insinuate your superiority in practice over others. I’m here to remind everyone that those who bash (with no track record) need to be looked at further and watched with a careful eye.

    BTW my commenting in the blogs would be very difficult to prove without proof that it was truly I that made these comments. I would like to see you present these threads in court to a judge in trying to attempt a malpractice suit. You would be laughed right out of the Courtroom.(which I’m sure has happened to you already!).

    Marc, I hope you do NOT take my jabs at you too serious. Its all in good fun and I’m sure you run a tight ship with Craig but I cannot help but attack anyone that continues to infer their superiority. You both kind of remind me of conceited guys in the bars that would wait for the girls to come talk to them. At the end of the night they always went home together wondering what the problem was and how come nobody noticed them……….

    I can’t wait for Craigs next entry on RCG. Hes the only reason I check in over there. I’m always ready to pounce on him yet as of late his entries on Strategic Default had no mention of his perceived superiority in practice…….So I behaved.

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