It's Raining Foreclosures

Michigan is currently #3 state of the US for foreclosures; and the thunderclouds are still rolling through as in Kent & Ottawa counties alone, 463 foreclosures have been posted in the last 30 days per the Grand Rapids Press.  A combination of ugly loans made to less than credit worthy recipients, 5/1 & 3/1 ARM's from the refinance madness now maturing causing higher than expected payments, or the unfortunate demise of job loss has created a bees nest of an unruly housing market.  Already being stung by a sluggish sales market, Michigan along with California and Florida is experiencing an unpresedented sales market like never seen in the last 30 years, frustrating sellers and pushing them into that sticky situation of losing their homes.

What to do??  Well, it might all depend upon what role you are in....here's some thoughts:

1. If you are a real estate agent, it's time to get aggressive and help your sellers take an honest look at the market and their own home, what options lie ahead for them, and reconsider is this the best time to sell??  Furthermore, is it the best idea to take that overpriced listing that the seller is SURE his/her house is worth??  Remember that you are in business to be successful and have successful transactions; and taking listing where sellers just will not cooperate with a struggling market is counterproductive to your goals.
2. If you are a seller and know that you are looking at not being able to make your house payments, there are a number of things you can do proactively.   A)  Consider listing your property with a very good experienced real estate agent.  Be sure to listen to him/her and take their advice.  They have the knowledge (at least most do) to provide you all the statistics of successful solds and unfortunate expireds to assist you in avoiding a foreclosure and selling prior to the bank making claim to your property.  This combined with a good strategy for getting your home ready for sale should be able to provide you a good foundation to avoid the lenders icey grip.  Remember too, that you are competing with other foreclosures to get your home sold, so competitive you must be.  B)  Call your lender.  These banks are well aware more foreclosures are on their way, and it might be possible to negotiate a possible short sale with them prior to trying to sell your home.  This gives you back some ability to keep your credit without losing your home, and again, by finding an agent who will work with you and the bank; it is possible to come to an agreement with a buyer, the bank, and you to preempt a foreclosure.  C)  Desperate times call for desperate measures.  Consider speaking with a credit counselor to find creative ways to maximize your budget, and minimize credit hiccups that can take years to cure.
3. If you are a buyer.....Congratulations!  You might be the biggest winner in this game.  There's lots to pick from, but be patient.  If you are looking for a good deal and a home in foreclosure, the bankers really don't care about your time and your potential move-in dates needed when presented with your offer.  The banks can take up to 8 weeks or more to give you an answer, and even then, it might be no to your offer.  I would suggest finding a HUD home first, they are the easiest to bid on, and to receive acceptances of offers with finalized move-in dates.  Also, please be aware, just because you've heard it said, "it's a buyer's market" doesn't mean you will automatically be able to save $50K on an offer on a home.  More often than not, the seller has already made all the price adjustments he can, so negotiations may surprise you and be tighter than you thought.  There is a common misconception that every home can be bid upon ridiculously.  Just not so.   The "buyer's market" also means that the prices have already fallen a great deal, and once the market comes back, there's equity money in your pocket just for living there!  Can't beat it.  So.....go and find yourself a great house for a great price.

That's it for today.  Stay posted......this is bound to remain an interesting topic.