Foreclosures in Virginia! The FEVER is back! But is it real?

By
Real Estate Broker/Owner with Northern Virginia Homes - FRANKLY REAL ESTATE Inc

The FEVER was lost for two years, but it's BACK!

My Virginia Real Estate blog showcases the trends before you ever knew they existed. This is a new trend, and it is on fuego. Problem is, is it real?

The message is slightly different, but the bottom line is still there: Buy Foreclosures, Flip and Get Rich!

In the past it was Buy New Construction, Wait a Month, Flip and Get Rich. (see my post on Taxi Drivers pooling their money during the top of the housing bubble)

This technique is also known as the greater fool theory. If you can buy it low, and sell it to a greater fool thinking he can do the same, you will profit. Rinse and repeat until the world comes crashing down like a pyramids of cards (oh and it did for some).

So now I see people wanting to rebuild the pyramid, and they want in on the ground floor.

When five people say to me within 2 weeks "If you hear of a place that is a steal, let me know, I might buy it."

Sorry, but if it is that much of a steal, and I hear about it first... You won't buy it because it will be sold. To me.

The problem is, 50% off steals don't exist. See the post on Parkside Alexandria Auctions starting at $225,000!!!, but ultimately they got bid up to an unflippable (<word not recognized by MS Word) market price (see Virginia Auctions Results Show post).

This new breed of wannabe opportunists think that the market is dead and nobody is buying... but THEM of course!

They are the brilliant ones alone buying at the bottom. Did you know that Parkside got 1500+ registered buyers to walk their community? All looking for what was quoted to be a "once-in-a-lifetime opportunity." 1500 people trying to buy from people down on their luck. You are not alone.

So back to these 1,500 people.

What are they doing? They are wasting their time and the time of their Realtors (not me, I just send people to this blog post).

Many Realtors are using foreclosures, short sales, bank owned properties, REOs as bait to bring in clients, hoping that a few will settle for 2-5% off instead of 50% off.

Even this post was written to be picked up by Google for people looking for "Fairfax Foreclosed homes" stuff. The difference is, I'm telling them it does NOT exist (well maybe in Herndon). So if bargain buyers contact me, most likely we will all be on the same page, that I can help you get the best "deal" possible (see:"Buyer's Market?" No Such Thing As a "Good Deal") but don't have unrealistic expectations. 

When my termite guy's (not a profit sharing ABA) wife stumbles upon my Parkside $225,000 Auction blog (along with a poker buddy), you know it's a trend. So this post was written just for her. (NOTE FOR REALTORS: this is why blogging is efficient. Write it once, and post it, with no need to repeat yourself. Oh how I plan to link to this post in the future, and you can too.)

Foreclosures sound great, but aren't nearly the deal of the century, 50% Kmart blue light special that many think they are.

Buying and fixing up properties is a real but tough business. There is no get rich quick system that I know of that works. And if I did, I probably wouldn't tell you. I would just do it and get out of residential real estate. If you become a flipper and are going to buy a run down property and fix it up, you better know what you are doing, and in a slow market, you better leave room to sell it well under market, otherwise you'll follow the market downward.

And as for people looking to buy their own home to live in, and solely looking for Arlington or Virginia foreclosures, you will most likely be sadly disappointed. Yes you should add them to your search,  but they are infrequent and many are fake. Yes many "short sales" or "3rd party approval" listings are fake, but not all.

An upcoming post will get into how Short Sales only close 50% of the time, and an upcoming post showing how one of my agents bought HER own home from a bank. So make sure you sign up for this blog via email at blog.FranklyRealty.com in the upper right corner.

- Written by Frank Borges LL0SA= FranklyRealty.com

(please report typos, and you want this post featured, members can hit the red flag icon and recommend it)

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Re-Blogged By Re-Blogged At
Location:
Virginia Alexandria City County
Groups:
Virginia Foreclosures Short Sales and REO (and Pre-Foreclosures)
Tags:
foreclosures
investors
buyers agent
subprime loans

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Anonymous
Nancy Pav
Frank-I'm curious as to why you think short sales are fake. Or do I need to just wait patiently for the next installment?
Nov 11, 2007 10:02 AM #1
Anonymous
Fran Gaspari
Frank,

Another excellent post telling it like it is!!! Thanks, Fran
Nov 11, 2007 10:02 AM #2
Anonymous
Kay Perry
I do not believe in get rich quick real estate business. In our city College Station, Tx, it is not possible to do such a thing because we have a strong market. Even in the recessions in the 70s, 80s and 90s, it was not possible. Flipping houses just don't work well here, in my opinion.
Nov 11, 2007 10:02 AM #3
Rainmaker
137,736
FRANK LL0SA Esq.- Northern Virginia Broker .:. FranklyRealty.com
Northern Virginia Homes - FRANKLY REAL ESTATE Inc - Arlington, VA
Hey Nancy,

You'll have to stay tuned. If I put everything into one blog post, you'd have to get it bound.

Frank
Nov 11, 2007 10:03 AM #4
Rainmaker
137,736
FRANK LL0SA Esq.- Northern Virginia Broker .:. FranklyRealty.com
Northern Virginia Homes - FRANKLY REAL ESTATE Inc - Arlington, VA
Hey Nancy,

You'll have to stay tuned. If I put everything into one blog post, you'd have to get it bound.

Frank
Nov 11, 2007 10:03 AM #5
Rainmaker
24,949
Shari Posey
Berkshire Hathaway HSCP - Long Beach, CA
If you've got 50% of all short sales actually closing you guys are doing great! In our area it's maybe 5%. I wouldn't waste my time on them.
Nov 11, 2007 12:35 PM #6
Anonymous
D'Ann
I also have a lot of clients looking for a "deal." Many times they are surprised to find that foreclosures and short sales are priced toward the top of a market in a neighborhood. They fail to see the reason why a home was foreclosed, often because an ARM adjusted and the home owners did not have enough equity to refinance...leaving the bank owning a home for more than it is worth in today's market. Many of my clients are finding that some of the best deals out there are average people...who bought low and are relocating now for whatever reason. I just sold a home in Vienna, VA for $622,500. The sellers were the original owners, who purchased in 1966 for $36K...seems they had a lot more wiggle-room on the price than most of the short sales out there :)
Nov 11, 2007 11:57 PM #7
Anonymous
Silvia (Frank's mother)
Your blog you mentioned:
"You won't buy it because it will be sold. To me. "

Well....You probably don't know THIS story:
Of why/how we bought an investment property in Arlington 20 years ago.

Your uncle was new in town...looking for a place to buy in Arlington.  I started looking for house for HIM (since I liked doing this) and came upon the house on North Rochester near East Falls Church Metro.

I called him up "Albert, I've got the bargain for you" (a for sale by owner, actually being sold by 2   neighbors....the guy from the house had died)

The reply was "No answer or lukewarm answer"

Your uncle calls me 2 weeks later "Silvia, you know...the house you mentioned to me awhile ago..."

I said: "Sorry....it's sold"

Albert: "Oh darn, how do you know?"

I said: "Because we liked it so much, we bought it!"

;>)


Nov 12, 2007 02:55 AM #8
Rainer
58,790
Yogesh Karki
Signature Realtors, Inc. - Springfield, VA

I like it pretty candid

 

Mar 18, 2008 08:24 AM #9
Rainmaker
283,906
Gene Allen
Fathom Realty - Cary, NC
Realty Consultant for Cary Real Estate

Bait and switch still lives and our reputation is still with us.

Jan 07, 2009 12:14 PM #10
Rainer
39,527
Patrick Schutte
Flex Realty - Prescott, AZ
REALTOR

I can't wait to see the post about the agent who bought her own home back from the bank...

:) PS

Mar 16, 2009 05:00 PM #11
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Rainmaker
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FRANK LL0SA Esq.- Northern Virginia Broker .:. FranklyRealty.com

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