AP Article on Foreclosures Gets Me Thinking...

Below is a link to an AP Newswire article saying that foreclosure rates are up 25% year over year for October of 2008 back to October of 2007.  As folks who read this blog know, in a way our real estate practice has benfitted from the spate of short sales and foreclosures but the last two years have been a real eye opener for us as well - on  a lot of levels.

My heart goes out to folks who truly have financial misfortune and find themselves upside down and unable to stay in a home they thought they could afford but that is only one piece of this group of underwater properties.

More and more I am going into homes that were built by speculators and investors, they never lived in the home and they did 100% financing on the home - and now they cannot sell them for the outstanding loan balance and they end up in foreclosure. And here I'll use a specific to describe a general, never a good thing, but we have one where someone, AFTER they tried to sell the home themselves and before the home ends up in the property of the bank, literally REMOVED the KITCHEN from the building. Went in with a sawzall, cut the plumbing back to the wall, took every cabinet, appliance, counter, EVERYTHING. Now I can't say for sure WHO did this but the home shows no sign of forced entry. IF the previous owner did it, exactly how does one square the idea that although the bank financed EVERY dime of the home, if it's headed to foreclosure and the bank is going to lose 100's of thousands ANYWAY, then this person can in good conscience take a 50 to 60 thousand dollar kitchen with them as well??

We see it all the time, people are mad at the bank and destroy the home as they are leaving. SOOOO they leave all their NEIGHBORS with an eyesore that cannot be sold and when it does it severely depreciates values all around them and somehow they "punish" the "Bad Ol Bank" for loaning them money they probably shouldn't have borrowed to begin with!  I guess I don't understand that logic at all.

I am no advocate for banks who made loans to people who had no business borrowing more than they can afford but conversely I feel if the bank financed the home, all of it, then if you give it back to them you should give it back, INTACT.

What do you think?

http://www.floridarealtors.org/NewsAndEvents/n2-111308.cfm

- Mike W.

Foreclosed homes bring stinky pools and health warnings!

Saw this article today from Florida Association of Realtors and the South Florida Sun-Sentinel about the number of dirty pools in Florida due to foreclosures and it struck home.

From what I've seen it is not just foreclosures that end up with that as an issue. As you know if you read this blog at all, we now do a large number of short sales and distressed properties and it seems like the VERY first thing to go when homeowners are cutting back and considering having to short sell is....the pool guy!!  :-)    And a lot of the property management companies that banks use to sell their REO property may have the lawn mowed but never hire pool care.

The OTHER thing I have learned is that, particularly down here in Paradise, you stop putting chemicals in the pool and even if you run the pump night and day it will be green in about a week to ten days. When they let the electricity go off and then the pool doesn't run - well the pool looks like pea soup in as little as 4-5 days. And if there is no cage then it starts looking like a science project with polliwogs and toads and snakes and mosquitoes pretty darn quick.

I AM amazed though that I find home LISTED for SALE where the power is ON but because the owner fired the pool guy no one is putting chemicals into it and even though it's running it's green.  What we find is that, regardless of how well priced it is - if the pool is green it is SO much harder to sell.  So I am always encouraging sellers, even those upside down on the loan, if they are serious about selling to keep the pool up but quite honestly I now almost always have a bag or two of shock in the back of the car and some chlorine tablets.  At the last short sale we closed (and it was for three quarters of a million dollars on Siesta Key) the buyer asked for the number of the pool guy so he could continue on the "contract" with them. I opened my trunk and pointed to my chlorine tabs and said that the pool guys last day was.....TODAY! Me!

Here's the article - the situation really ISN'T funny if this pool is next door to you:

http://www.floridarealtors.org/NewsAndEvents/n3-061008.cfm

- Mike W.