Dallas Foreclosures

Mortgage Companies and Banks own Dallas real estate because they have acquired these properties through the foreclosure process. Properties on the bank’s books are called REOs, which stands for “real estate owned.” When banks receive property through a foreclosure, it’s because no one bid the minimum amount of the existing mortgages at the courthouse steps. These foreclosures may not seem like a good value, especially if the bank wants to sell these properties for the amount that was owed to the bank by the previous property owner. With all that said, here are at least two reasons why an REO can be a great value to you:

If there were two mortgages on the property the second lender may not want to foreclose on the property. If the second lender does not make up the back payments and cost to the first lender and that first lender goes forward with its own foreclosure, the second lender will get wiped out in the foreclosure, a devastating loss to that lender.

 The bank does not, and cannot sit on its foreclosed property. Since the bank did not receive its minimum bid from a buyer during the foreclosure sale at the courthouse, the bank is likely to price that REO property for less than what is owed to them just to get that property of its books.

Negotiating for REO Properties

      If the property listing is new to the market, it is very likely that the bank will not come off much from its listed price. You will have better negotiating power if you go after properties that have been on the market for more than 30 days. Here are a few more tips:

        Many banks will not paying typical closing cost for the property buyers. Some fees such as title policies, county and state fees, are paid by the buyers and not the bank. Banks generally will not pay for termite inspections, repairs or home warranties.

       Banks often negotiate bulk-rate discounts with title and escrow companies. If you choose to use the bank’s title/escrow company, check the fees of those companies. Typically, fees not paid by the bank but paid by the buyers will be higher because title and escrow companies often make up those discounts by charging the buyers more.

      Some banks will not sign a counter offer until all the terms are mutually agreed upon between all the parties verbally.

      Expect that the bank will require you to sign its own addendum to your standard purchase contract. Read it thoroughly and ask a real estate attorney for advice if you do not understand everything in it. You can bet the bank’s lawyers drew up that addendum, and it’s not in your favor.

If the bank won’t budge on its price and you receive a rejection, wait 30 days and then resubmit your original offer.

You might wait 10 days, or more, for a response to your offer from the bank: be patient.

The bank may ask for you to submit a loan application to them so they can prequalify you so they will be sure you can close on the property. You will not be obligated to obtain your mortgage from that bank.

If you cannot close by the closing date listed in the contract, the bank may charge you a penalty for each day you don’t close pass that date. Make sure you have get a mortgage pre-approval from your own lender before submitting an offer to the bank so you will have assurance that you will receive the financing from your lender without running into unexpected delays.

There are some drawbacks to buying a foreclosure property. In almost every case you will likely be required to buy the property in “as is” condition. You still have the right to make your offer subject to a home inspection though.

Do yourself a favor and retain the services of a professional Dallas Realtor to guide you through the ins and outs of the Dallas foreclosure market. The best thing is that you get 100% representation and it cost you nothing because the bank pays the Realtors commission. You Win!

Are things really different in Texas?  What is the Texaplex?  View this video and see why there is a mass exodus from other parts of the country to Texas.  See what elements are coming together to fuel the boom to come.  Is Texas truly the land of opportunity?

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VIP Realty Platinum is a Dallas Real Estate Brokerage Firm that offers many exclusive benefits to its clients and now adds another “Value Added Service”.  They now provide a Human Edited

VIP Realty Platinum Broker, Harry Ridge, tells his clients not to waste their time with sites like Zillow.com, HomeValues.com and the like because these automated services rarely provide home owners and home seekers with the correct values of homes.  To prove this point click here: Zillow Data Coverage and Zestimate Accuracy and see the numbers for yourself.  You will find a high degree of inaccuracy.  *As of 10/2009 Zillow’s Median ERROR is 34.2% in the Dallas/Ft. Worth area. 

Each market area can differ by thousands of dollars for similar types of houses, even houses located only a few blocks away.  Ridge goes on to say that there are only two ways to get the actual market value.  One way is to obtain an Appraisal from a duly licensed Appraiser costing in excess of $400.  The other way for a Dallas area homeowner is to have one of VIP Realty Platinum’s experienced, professional Realtors complete a comprehensive market analysis for them.         

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Whenever you feel nervous searching for your first home, on the Plano MLS , make sure to keep in mind the many benefits of home ownership:

1. Appreciation – Real estate, even going through a down cycle, consistently appreciates. A home is also an investment, a investment in your future.

2. Pride of Home Ownership – The main reason that first-time home buyers purchase a home is because they want to experience the pride of being homeowners. When you own your own home you have the freedom to paint the rooms any color, increase the volume of your radio without worrying, decorate any way you want and so much more. Home ownership means freedom from landlords and all their restrictive rules.

3. Deduct the Interest on your Mortgage – There are several tax benefits to home ownership that includes deducting the interest you pay on your mortgage. This is great news since interest is the biggest part of a mortgage payment.

4. As you pay on your home loan, you are building the equity in your home, which you can tap into at any time. If you ever need a loan to pay for college, expenses, credit card debt, or for other various reasons, then equity is a great financial resource to have.

5. The $8,000 tax credit is another reason to invest in your own home now.  This credit is a true credit and does not have to be paid back.  But hurry, this program ends November 30, 2009!

Home ownership is an incredible feeling. If you are a first-time home buyer do not be nervous about taking the invigorating plunge into home ownership.  The benefits will far outweigh the risk.

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• Texas is the number 1 top state to relocate: According to Allied Van Lines’ 41st Annual Magnet States Report, Texas is the No. 1 destination state for residential relocations for the 4th year in a row. New data from the U.S. Census Bureau confirms that Texas gained more residents (484,000) between July 2007 and July 2008 than any other state.
• Texas continues to have steady job growth: According to the U.S. Bureau of Labor and Statistics, Texas added 153,700 jobs (1.5% increase in employment) from December 2007 to December 2008, while during the same time the national unemployment rate rose 2.3%.
• Texas benefits from a strong, diverse economy: Texas is strong in industries that are still growing (such as professional & business services, education & health services, government) and has the second largest economy in the nation by GDP according to the U.S. Bureau of Economic Analysis.
• Texas homes have appreciated steadily. Home-price appreciation in Texas has not fallen below zero in the last 16 years.
• Texas has steady home value appreciation. and Texas housing prices have remained relatively steady.
• Most Texas borrowers are approved for financing. According to a report by the National Association of REALTORS®, 91% of buyers in Texas were Not rejected by lenders last year.
• Texas real estate remains a strong long-term investment. The average home sales price in Texas has increased $15,600 from December 2004 to December 2008; over the same four years, median sales prices increased $8,600.
• Texas has a balanced market. Statewide, there was 6.4-month inventory of homes for sale at the end of 2008. Economists at the Real Estate Center at Texas A&M say that about 6 ½ months of inventory is a balanced market, where homes are being sold and prices continue to increase at a moderate pace.

This is good news for Texas homeowners, both current and future.  Keep informed of your homes value.  As steady as she goes…

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If you follow all these tips your house will make a impression on potential buyers and your chances of selling your house will skyrocket!

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