The Two Best Deals in Real Estate!

Real Estate Agent with Keller Williams name is Byeloth Hermanson, with Keller Williams Realty.  There is a lot going on in real estate right now, and changes seem to happen every day.  Even though you may have bought and sold homes in the past, I like to make sure that you feel completely comfortable with today's market full of Short Sales and Bank owned properties.  I have provided some basic info that I hope you find helpful and not too redundant.  Please feel free to contact me anytime you have a question regarding anything related to real estate.  Always at your service!  360-521-7729

 As a CSSS (Certified Short Sale Specialist) - here's that link ... , I have taken many classes that have taught me much, much more than basic info regarding the process.  Let me give you a little more insight to the process.  Over 28% of ALL the available inventory of 3364 Active listings are Short Sales, here in Clark County.  There are another 5% of Active Bank Owned homes for sale.  That makes for 33% of the entire inventory of Clark Co. to be Distressed Properties.  These are the absolute best deals available today!  There are many advantages and disadvantages to both. 


Bank owned properties are listed at approx. 20% below market value of comparable non bank owned homes...they are the absolute real deals!  The price is set by the bank, who has reacquired the property through foreclosure, and they have a clean title.  These properties are sold AS-IS, and the bank will not provide any repairs after you perform the inspection.  But there are actually two inspections performed these that you may do by hiring a licensed home inspector to ensure you are buying a good home and investment, and the second inspection that the lender requires, which is done by the FHA appraiser.  If the appraiser sees something that is against FHA policy (no floor covering, a roof that does not appear to have 3-4 yrs of life left, a home with siding or dry rot issues, or a home with flaking paint or other deemed Hazards) the loan will not be granted until the repairs are made.  This is called a funding condition, and most banks will cover up to $2000 in repairs for these types of repairs.  If the bank didn't do this, the only way a buyer could buy the home would be for cash!  Another thing to note, is that Obama took control of Fannie Mae, and is carefully regulating the flow of foreclosures on Fannie Mae/Freddie Mac mortgages.  These amount to over 51% of all mortgages in the US.  We will be seeing much more bank owned properties hit the market in 2010, due to the moratorium on foreclosures being lifted that was initiated in Feb. 2009 (was only suppose to last 90 days, but lasted all of 2009)  This is why we have 28% Short Sales, and only 5% bank owned.  As a result, most bank owned properties hit the market, and are bought first, and often bidders are involved in a "highest and best" bidding war on these type of properties.  A nice ranch listed for $165,000 can easily escalate to a sale price of $175,000 or more, if many bidders are trying to win the prize.  I have a proven strategy that has worked for me in the past, which I will be happy to share with you when the time is right.  Bank owned homes are the best deals, always sell, and are almost always bought for list price or higher!


Short sales properties are homes where the seller owes more than the property will appraise for, but if the 3rd party bank accepts the offer, are also a great opportunity for instant equity.  There are limitations that you need to be aware of.  Short sales always remain Active on the RMLS even though there may be 5 offers on the property.  The listing agent can market the property for what ever price they determine will attract the most buyers (to sell other homes to) and the most offers.  The bank will never tell the listing agent upfront, what they will accept as the bottom dollar.  Instead, they play a game, of list and guess.  After the bank receives an offer they hire a local realtor who has signed up to do appraisals for that specific bank.  This is called a (BPO - Broker Price Opinion) and is basically a $35 appraisal.  Banks can't afford to pay for a real appraisal at $400, when they are taking in 3000 to 4000 short sale offers every day!  The rule of thumb for a banks acceptance of an offer is usually 82% of market value.  That means that if I run comps, and offer the bank 18% less than market value net to bank, the bank will usually accept the offer and grant an approval letter that begins the "normal" closing process.  Banks are now taking 90-120+ days to process an offer.  If the listing agent isn't experienced with Short Sales...there is a zero chance that it will ever close!  Sellers don't care what the house sells for, as they walk "free and clear" and can purchase a home in as little as 2 yrs.  If a foreclosure happens you might be eligible to purchase in 8-9 yrs.  A huge limitation preventing many short sales from closing is the fact that Obama put restrictions on Fannie Mae/Freddie Mac mortgaged homes (51% of all US loans) that limit 2nd lien holder payoffs to a max of $3000 for 2nds above $40,000, and $2000 for 2nds under.  If a 2nd lien holder is owed $80K and is not the same you think they are going to be ok with receiving $3000? Nope...that deal will never happen.  I make sure we avoid these types of time wasters, dream killers, and we can focus on the homes that the bank will accept.  The competency of both agents during the short sale process is critical to the deal closing.  I am a trained expert, and know exactly what to ask, up front.  Another benefit to Short Sales is that you can legally (only if you use the right contract addendum) place multiple offers on multiple short sale properties.  You can't do this on any other type of homes, as it would be considered FRAUD, and is illegal.  Short sales are sold AS-IS, but the bank will not pay a penny for funding condition issues on appraisal.  If it doesn't pass...they don't care.  I will make sure that the home we put an offer on, will pass appraisal...and if I don't think it will, I will point out the reasons why.  This way you can decide if it's worth it to pay for repairs out of your own pocket, just to pass appraisal.  I know the home would have to be pretty nice for you to do this.

CAll ME AT 360-521-7729!  I will help you find the right house to call... home.  

Comments (3)

Clark Hitchcock
Re/Max Nyda Realty Inc - Chilliwack, BC
Realtor - Fraser Valley

Interesting to read how things are your side of the border.

Jan 20, 2010 05:25 PM
Fernando Herboso - Associate Broker MD, & VA
Maxus Realty Group of Samson Properties - Clarksburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

Your statistics on your area are in line with the rest of the country. .thanks for sharing it with us

Jan 20, 2010 09:46 PM
Joe Sosky
KW Commercial - Vancouver, WA
Commercial Real Estate Broker - (360) 816-9652

Byeloth, great points you made.  I learned alot from this blog.  Thanks for sharing.

Sep 06, 2010 05:45 PM