Finding Equity In Foreclosures - Timing The Market

By
Real Estate Agent with Berkshire Hathaway HomeServices PenFed Realty MD#657171

First, I have to admit that I don't really know how Fannie Mae decides the listing price when they bring a foreclosure to market.  My guess is the price is decided by the same folks who are tasked with working through a great deal of inventory in very little time without ever laying eyes on the property.  The result, however it occurs, is that Fannie seems to be pricing their properties about six months behind the market.

My client was a single young lady looking for her first home.  Finding something she could afford was proving to be difficult.  You see, the listing prices at the low end of the Ocean City real estate market had been moving higher through the spring and summer months.  As the lower priced homes sold we were just not seeing new listings to replace them.  Without lower priced competition, the new listings we did see were being priced higher.  Except for, you guessed it, Fannie Mae foreclosures.  Their properties appeared to be priced based on market conditions from earlier in the year. 

My client and I visited new foreclosure listings as soon as they came on the market.  We looked at a property that was in excellent condition and she made a quick decision.  We submitted a carefully prepared (if you have ever worked with Fannie Mae you know what I mean) offer.  Within a week she had a signed contract and the rest is history.

In this case the foreclosed property had a sister property two blocks away that was also on the market.  The houses were of identical design, constructed by the same builder, and built at the same time.  The closing price on the sister property was thirty five percent higher than my client's purchase price.

The key in this case was being able to act quickly when Fannie Mae could not.  The result was a happy, young client with equity in her first home.  

   

 

Posted by

To find out more about J.D. Wells - Realtor® with Berkshire Hathaway HomeServices PenFed Realty in Ocean City, MD, visit www.OceanCityBeachRealEstate.com

Comments (16)

Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Consider you are lucky. To get first time home buyer they often get confused and not able to make an offer quickly & realistically.

Sep 11, 2015 07:25 AM
Captain Wayne - Rowlett Real Estate School
Rowlett Real Estate School - Panama City, FL
Rowlett Real Estate School / Owner and Instructor

Way to save your customer some cash! I have been around long enough to be able to look back and notice a sort of an ebb and flow that the market constantly undergoes. I can almost read the timing right. As per the Maes and Macs, I feel just make up stuff as they go...

Sep 11, 2015 07:25 AM
Captain Wayne - Rowlett Real Estate School
Rowlett Real Estate School - Panama City, FL
Rowlett Real Estate School / Owner and Instructor

Welcome to ActiveRain. It's great to have you aboard. I look forward to reading more of your posts.

Sep 11, 2015 07:25 AM
Chip Morgan
Long Realty - Dove Mountain, Marana AZ - Tucson, AZ
LSS, LSE, LMS

It sounds like she had a great resource in Real Estate to help put her at ease... it's not very often a first time home buyer will move that swiftly!  Nice work helping a client out that was in need.

Sep 11, 2015 08:08 AM
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Foreclosures can be a great equity builder for the right buyer, I have done very well with these too.

Welcome to Active Rain John, looking forward to reading many more of your posts, let me know if there is anything that I can do to help as you get started here.
Bob

Sep 11, 2015 02:47 PM
Anna Hatridge
R Gilliam Real Estate LLC - Farmington, MO
Missouri Realtor with R Gilliam Real Estate LLC

Welcome to Active Rain!  Your first blog post is right on the mark for how to help your client be successful.  I think the secret to helping her with the purchase was you were prepared and you had her prepared to act quickly too.

Congratulations to both of you.

Sep 11, 2015 03:01 PM
Anna Hatridge
R Gilliam Real Estate LLC - Farmington, MO
Missouri Realtor with R Gilliam Real Estate LLC

John, I hope you will hop over to my blog and find something interesting enough to click the like button and follow my blog too.  Again, congratulations on your first post. Well done.  

Sep 11, 2015 03:03 PM
Sybil Campbell
Fernandina Beach, FL
Referral Agent Amelia Island Florida

John,  I have looked at and have shown several foreclosures but never found one that I felt was worth the risk.

Sep 11, 2015 03:36 PM
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Good morning, John Wells that was a nice story to read and congratulations to you for your quick response time.... lucky buyer to have an agent who pays close attention....

Sep 11, 2015 08:41 PM
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

and welcome to ActiveRain....I'm glad to see you're a Rainmaker rather than a rainer status....and you'll get the full benefit of Google Juice with your blog posts.... this platform is a great place to learn, share, market and network....enjoy all of it....

Sep 11, 2015 08:42 PM
Nicole Doty - Gilbert Real Estate Expert
Zion Realty - Gilbert, AZ
Broker/Owner of Zion Realty ZionRealtyAZ.com

Back a few years ago, HUD owned properties were that way in my Arizona market. I had a few buyers that got fantastic deals because of it! Welcome to Active Rain John!

Sep 12, 2015 01:31 AM
Mery Fernandez Empire Network Realty Luxury Brokerage
Empire Network Realty INC. - Orlando, FL
The Rise of An Empire, Let's Build Yours!

Hi John!! Welcome to the world of Activerain, may your blogging  create a whole new chapter in your Real Estate Career.

Sep 15, 2015 11:34 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

J.D. - It sounds like you did a great job working for your buyer and made for a happy home owner.

Sep 23, 2015 04:09 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

J.D. - Welcome to the ActiveRain community, and congrats on your first post here.

Sep 23, 2015 04:10 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Please know that the ambassadors, those with orange badges, are here to help and answer questions.

Sep 23, 2015 04:10 PM
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

J.D. Wells Welcome to Active Rain!  As REALTORS who have been here (on and off) for close to 9 years, it's well worth it!

Sep 30, 2015 11:57 PM