Daily Real Estate News  |  January 11, 2008  |   Foreclosures Offer Opportunities for the Savvy
The foreclosure arena presents opportunities for real estate professionals who know what lenders expect of them and can deliver first-rate performance, speakers agreed at Thursday's panel, “Working with Foreclosures,” during an Inman News-sponsored conference, Real Estate Connect, in New York.

Home foreclosures were averaging 200,000 a month nationally during the last six months of 2007 and show no signs of slowing this year, said Rick Sharga, vice president of marketing with RealtyTrac, which compiles national foreclosure statistics.

Roughly half of all foreclosures end up being taken back by their banks and lenders, meaning that of the roughly 2 million foreclosures expected this year, 1 million could be back in the for-sale market, he said.

The lag time between foreclosure and attempts to resell the homes nationally is roughly three months, although in some states such as New York, local laws stretch the process out over a much longer period of time, noted Sharga and other speakers.

The REO Niche

The country’s troubled subprime borrowers are facing two waves of interest rate resets this year that will spur more defaults and subsequent foreclosures, Sharga said. The first wave of resets is underway now with the second coming in the May-June period.

Bank real-estate-owned (REO) staffers want to work with real estate pros who know their markets and know what banks expect of them, said Rupi Rupwani, a director of the Connecticut MLS and owner of Rupwani Associates, a real estate company in Naugatuck, Conn.

“If you want to handle REOs you have to believe in service,” he said. “Seventy percent of the people in real estate don’t know how to handle REOs.”

Banks being flooded with REOs won’t be patient if you approach them and don’t know the basics of what they expect, he said.

Rupwani said service includes knowing:

• How to prepare estimates of what an REO will sell for.
• How to work with potential buyers to disclose details of the property
• How to navigate through the sale of a home that may have multiple lenders, including a first mortgage holder and home equity line of credit holders, all hoping to get some of their funds back.

— By John N. Frank for REALTORŪ magazine online


To read more dispatches from this week's Inman Conference, visit REALTORŪ magazine online's editor's blog, Speaking of Real Estate.