George Roddy, Jr. and his father compile the list of properties that are posted for foreclosure each month in Texas.  I had an opportunity to hear him speak this morning at the Keller Williams - Plano office meeting.  WOW!  What a treasure trove of information he provided!  Here are some of the highlights from his presentation:

• There are 3 ways for real estate agents to make money from foreclosures.
   1) Represent the homeowner facing foreclosure (short sale)
   2) Represent investors who purchase from homeowners facing foreclosure or at the foreclosure auction
   3) Buy foreclosed real estate themselves as investment properties
  
• The list of properties to be foreclosed comes out 20 days before the auction (in Texas). 
   You can go to the courthouse to see the posted properties, or you can subscribe to a service to get the
    list.
  
• There are 5 options for homeowners facing foreclosure:
   If they want to stay in the house:
   1) work with the lender on a payment plan
   2) refinance - must get current
   3) file bankruptcy
   If they don't want to stay in the house:
   4) sell the house
   5) do nothing
  
• Effect on FICO score:
   Short Sale - approximately 80 point reduction
   Foreclosure - approximately 280 point reduction
  
• If you or your buyers are interested in purchasing foreclosures at auction, go to the auction with a list of at least 20 properties to purchase.  Do three things to help make this list of properties:
   1) prepare a comparative market analysis on all properties that are of interest
   2) do a title search (there may be additional liens)
   3) drive by the properties to see the outside
   These things will help you narrow the search to those that are suitable from the hundreds available.
  
• Only about 45% of the properties listed for auction are auctioned on the first Tuesday of the month (Texas schedule). (He didn't say what happened to the other 55%.)
  
• Approximately 93% of the time, the bank is the highest bidder at the auction.  Only about 7% of properties are sold by the trustees to investors.
  
• The average selling price of those properties sold and not bought back by the banks is $.70 - $.75 on the dollar (compared to the value of the home).
  
• Sources for purchasing foreclosures:
   1) Foreclosure auctions at county courthouses
   2) Institutional Sellers:
       a) HUD homes (listed in MLS)
       b) REO homes (real estate owned by banks, sold through real estate agents &/or real estate auctions)
   The disadvantage of foreclosure auctions: greater risk, no title insurance.
  
• George thinks we are bottoming out with foreclosures locally (Dallas/Fort Worth area).  The last few months there have been about 1800 foreclosure postings in Dallas County and about 350 postings in Collin County.

George teaches several classes on foreclosures, short sales, how to do title searches, and more (open to investors and real estate agents).  What a wealth of information!