Are all foreclosure "DEALS" equally great? The mistery of pricing and call for due diligence.

By
Real Estate Agent with Local-n-Global Realty, Cleveland and International Real Estate Solution BRK 2007000844

With such a big inventory of bank owned homes in Cleveland you can expect a reasonable pricing. When I say "Reasonable", I mean priced differently or similarly FOR REASON, not just based on square footage or comparable sales in the neighborhood.

First of all, do they compare apples to apples when price these properties? 

Let me tell you the story. Thanks to blogging at Active Rain I've got this wonderful client from overseas who hired me to assist him in distant buying of few investment properties in Shaker Heights, University Heights and Cleveland Heights. I am previewing all these houses which look like great DEALS to me and to my client. I am taking numerous pictures, creating PDF slide shows, composing very detailed reports about the houses, and sending them to my client.

I am freezing outside and inside because there is no such thing as heated GREAT DEAL (a.k.a. Bank Owned Property, or REO) in Greater Cleveland. I am feeling sad while taking the pictures of far-from-prfect bathrooms and messy, moldy ceilings and walls.  I am falling in love again and again with amazing architectural details, wonderful wood work, charming fireplaces and smart floor plans of used-to-be-gorgeous Shaker Heights homes.

Shaker Heights 

I keep wondering what kind of CMA appraisers and brokers used to price these houses? Let's start from the fact that most of bank owned properties are not in fact the Houses - already or yet. They are the Projects to Become  the Houses After Additional Investment of Time, Efforts, and Money. May be it's not true for Florida or California,  but it's so in Greater Cleveland.

Why then the house which needs some plumbing check out, painting  and re-decoration is priced the same as total mess with rotten window frames, leaking roof and stolen pipes? Only because they have the same square footage and are on the same street?

Banks need a good reality check when they price the houses. They need to categorize their REO better. At least they need to distinguish Almost-The-Houses from Big-Project-to-Do-Before-Bringing-This-Back-to-The-House. It's not correct to compare these two categories of Real estate!

My clients get surprised why I am not sharing their enthusiasm regarding great foreclosure "deals" which they find time by time over the Internet. I was always very precautious about the bank owned and short sale properties on our Greater Cleveland Real Estate market. The reason is simple. We have real winters here in Cleveland! 

Real winter in Cleveland

Most of the bank owned properties in Cleveland have been winterized and just few of them have heat and electricity turned on. Without the utilities turned on you have no chance to diligently inspect the property. In Greater Cleveland, You 'd be better assuming the worst while buying the vacant house with no utilities. Although it sounds like a good idea to winterize the vacant house, there is a big problem with winterized properties for the buyers. Unfortunately, we never know when exactly the house has been winterized and how long it stayed vacant before winterization. When it's almost sub-zero, like it's now, there is a big danger of pipes being frozen and water and sewer lines being severely damaged - BEFORE the winterization.

Winterized - but WHEN?

However, we have few very solid bank owned homes in great neighborhoods of Shaker Heights, University Heights or Cleveland Heights, which are priced just right. It's a great opportunity for serious cash investors.

Need a serious, diligent Real Estate agent to represent your interest in buying the investment properties in Greater Cleveland?

Call Svetlana directly 216-548-4663   or call Local-n-Global 24/7 Real Estate Hotline 877-770-5551.

 

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Rainmaker
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Dan and Amy Schuman
Howard Hanna Real Estate Services - Solon, OH
Luxury Home Specialists

Hi Svetlana, I get a ton a buyers who want a "deal" on a bank owned home and I don't see the banks that agreeable with their pricing. I have seen some aggressively priced homes in Solon recently that sold quickly. If banks want to sell, they need to get more realistic, especially in winter. Stay warm.

dan

Jan 30, 2009 01:19 AM #1
Rainmaker
570,080
Svetlana Stolyarova
Local-n-Global Realty, Cleveland and International Real Estate Solution - Mayfield Heights, OH
Local-n-Global Realty, Broker 216-548-4663

Dan - you are absolutely right. Realistic pricing is what we need from the bank. It's important to distinguish the houses in real bad condition from decent homes. Otherwise we get a big appraisal mess.

Jan 30, 2009 03:03 AM #2
Anonymous
Moises
Encyclopedia of New York City states that rrdbeos of Prospect Heights are Atlantic AVe to the North, bounded East by Washington Ave, south by Eastern Pkwy & West by Flatbush Ave.Crown Heights rrdbeos are North-Atlantic Ave, East-Ralph Ave, South-Empire Blvd and west by Flatbush Ave.Hope that clarifies for all.
Apr 01, 2012 01:35 AM #3
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Rainmaker
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Svetlana Stolyarova

Local-n-Global Realty, Broker 216-548-4663
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