“REO” is of course banked owned foreclosed property.

And it’s strange how things sometimes run in streaks.

Today – I wrote an offer on very sharp 43551 REO listing.

Showed one.

Listed one.

That’s all normal . . . here is what is interesting:

1. A new RIVER ROAD REO property (30571 East River Rd.)  On the water.  That does not happen every day – in fact it’s incredibly rare.  $175k.  2500 sq. feet.  Township with Rossford Schools.  Last sold for $100k more . . .

2. A “builder’s own home” type REO listing.  We are putting new carpeting in it as I write this – with a 3 car garage, finished basement, and all the bling/bling you would expect.  $180s’ with close to 3000 sq. feet – and I think it’s worth LOTS more . . .it’s open this Sunday from 1 to 3.  507 Harrison Dr. in Shawnee Trace.  It just might be underpriced by $30k . . . at least!

I wrote an offer or two this week.  On Perrysburg properties.  Being sought after by investors.

It’s common.

And it’s getting to be more common.

Think about where you can invest your money:

1. Stocks.   Maybe smart.  Maybe painful.  Check out the history of FSLR, my favorite stock, and hold on.

2. Bonds.  The returns are not much though.  In fact, this week, large investors were willing to PAY money to invest in German government securities.  Imagine that strategy taken out enough years  – you will have NO money with a long enough investment.

3. Cash.

4. Gold.

5. Other investments.

6. Real estate.

I had to list a house in Toledo today – $12,000 or so.  My firm last sold it for $70,000.   Now there are some terrible facts and realities associated with such a market crash.

Ignore all of them.

Instead imagine you bought the house for $12,000.

What could you do with it?  What kind of rental income could you get? What is the upside?  What tools and skills would you need to make it into a great rental property?

Again – people are seeking out real property in this collapsed, depressed market.  To invest in.

Inventory is down by over 20%

Interest rates are at all time lows.

Rents are up and rising.

And multiple offers are hitting on good houses.

And I think fortunes may be made right now . . . in Perrysburg rental property.

In the Township.

With low taxes and a great lot.

Oh, and it’s just been foreclosed.  “Gently foreclosed” as the former owner cooperated with my bank client on the way out.

3 beds.  An enclosed 3 season porch.  The finished basement needs new carpet (it’s missing).  With a nice living room that has been turned into a den.   And all new paint on the inside.

$168,500 with Fannie Mae paying up to 3.5% of your closing cost and or buying you new appliances.

1. Have a finished basement without a back up plan for the sump pump.   The power does go out . . . and if your plan is to call Toledo Edison and beg for faster service . . . .

2. Get your home/budget/mortgage in trouble and not talk to people.   It’s public knowledge.  Some people are going to charge you by the hour and do nothing – some are going to pester you on the phone and do nothing.   Get some special help.

3. Buy an extra house.   Not now.  Not in this market.   Sell your current one first please.

4. Buy REO property to “flip”.  You are not going to do it.  You are not going to make money.   There are lots of good reasons to buy REO as an investment – flipping is not one of them.

5. Pay someone upfront to sell/market/advertise your house.  Just plain bad business.

6. Hire a real estate agent without asking a page or two of questions about them and for them to cogently answer.  Many agents are abandoning the business right now (that’s a good thing!).  Some are carrying on to clients like they are full time producers while they have other jobs and even live in another state!

7. Fail to understand that the first showing of your house for sale in Perrysburg will occur ON THE COMPUTER.  Via the photos that your marketing agent has taken.   Failure to understand this costs you time, money, and sales power.

8. Don’t be pressured into buying right now.   Not by anyone.   There are good deals.   There are smart buys.  There are great personal business cases to be made for purchasing a home for many families.   There are also a lot of fear-based sales tactics that can lead you into a terrible decision.

We have a saying that you have to have heard before . . . something about location . . . perhaps this is familiar to you?

How about adjacent to Woodland Elementary?    Adjacent to Woodlands Park and Ft. Imagination?

Hard to beat this location!

You want more information – hit me with an email at jon@modene.com

Like today.   I just listed 3 homes in Toledo.   1 in Elmore.  1 in Oak Harbour.  And 2 in Perrysburg.

One in Perrysburg is on Eckel Junction – just down the road from where I used to own a house.  So . . . I know the neighborhood quite well.

You can walk over to Rivercrest Park – with or without the kids.  With or without the dog – but he ALWAYS wanted to go because there are always a lot of little and big dogs to sniff and or wag your tail at.    There are ball games going on.   The Y is right down the street.   And, of course, your kids can walk or ride to Ft. Meigs Elementary.

So it’s a pretty nice area to live in.

This house?  One owner.  Center-hall floor plan.  3 car garage.  And these are all very good features.   It feels “big” and has 2 laundry rooms – one up and one down.  The basement is finished too.

$280′s.   With a, did I mention it already . . . 3 car garage.

It is in true mint condition.

I admit it has been hard — for there are 2 markets in my world right now.

There is the Toledo Residential Market.   You know the one.  Lot’s of downward price pressure.   Some serious real estate problems that a lot of serious people are doing their best to fix.   That’s one market.

Then there is, at least in the scope of this blog, the Perrysburg market.   Fewer houses than normal on the market.   Less price pressure.   But still the buyers who are buying are not dumb.   They look over the Maumee River or back to whatever market they are moving here from . . . and they want a deal.   Even in little old Perrysburg.

They want the house to be in perfect condition.

With everything working perfectly.

And they want to move in right now.

Both markets are functioning but they are functioning differently.

Perrysburg buyers need to be very careful with the pricing strategy they are using and very sure of not only their financing options but also the ceiling they want to be at in any competitive bid situation (especially for REO houses in Pburg . . . ).

More and more loans are getting rejected.   Appraisals are a problem even in Perrysburg.   The old “throw ‘em an offer and see if it sticks / hood of the car pricing approach” does not work out very well in these times.

So – how do I read the market?

It’s really the same as it ever was!

The best homes in the best condition sell for the best price at the best timing possible.

If your house is on the market and no one is looking – it’s probably a pricing problem and not a marketing problem.

My guess is that the buyers are already aware of your house – they have just rejected it before getting inside of it.

Especially when it’s a rare rural offering.

3 beds.  2 stories.  1 long, long driveway.

6+ acres with a private wood lot.

And it’s a newer 1700 sq. foot Forrester/Wherle built house.  With a basement.

Price?

$149,900.

So you will have to act very fast.   Feel free to call or email if you want to get away the City and live in the Township.

(Hint: It’s the house smack dab in the center . . . in the middle of the farm fields, and the house includes all of the woods.

I don’t know.

2012?  2011?  2021?

No one does.

We are in need of a new model now.

A new model of buyer behavior.  Lender response to buyer default.  And seller behavior.   The old models are no longer working.  The chart has flaws.  Case-Shiller numbers are the best we have, but still flawed.  The new model of tactical defaults, bank “unforeclosures” to get TARP rebates, buyers who are REO’d or BK’d and have huge monthly incomes – they are all helping to rewrite the rule book.

They promise the seller.

Who promises the buyer.

Who relies on the promise: “The Short Sale Manager will give us an answer by the 21st of the month . . . !”

Sure they will.

Because they “promised” to.

But they lied.

Things are going to happen.

Something is going to change.

Events are going to modify their promise.

Why?  It doesn’t really matter, does it?

They (the aggrieved bank/banks) are in control.  They are being harmed.  They are losing money.  They feel like they can modify what was said last month just like the upside down seller can modify the terms of the repayment to the bank.

None of this is malicious or intentional.   It just happens.

So be very careful to be FLEXIBLE when you are selling via a short sale.

And be very certain that you can be MORE FLEXIBLE if you are attempting to purchase a short sale asset.

Flexibility will be required.

The pay off for your flexibility will be worth it:  either a forgiven debt or a great house at a killer price.