Are All Real Estate Sales Short Sales or Foreclosures?

If you are injured on top of a mountian and 3 helicopters land to pick you up, which one should you get in? Should you get in the Army Medivac Helicopter, Flight for Life or the News helicopter? The answer -- much like the foreclosure situation -- is not so obvious. On the mountaintop if you can still crawl, crawl to the Army Huey because you will be rescued for no cost and things work out fine. If all you can do is move your mouth, say Flight for Life, because they have the best trained medical people and best helicopters on the planet. For no reason whatsoever, should you get into the News helicopter because they won't have enough power to take off again with a passenger and you will probably die.

If you have a chance to buy a short sale property, just say no because at the last second the lender will change their mind and they won't go through with it. This is a fact that all Brokers know. A property that has been through foreclosure and is banked owned is only slightly better. The real values in today's market which account for 7/8ths of the closings, is a seller that wants to sell bad enough on a clean transaction and the deal gets done.

Too Much Of A Good Thing

Could we start with that it is actually possible for there to be too much snow? This season is doing great business for Summit County because of a spectacular snow year. We are really only like farmers because we rely on the weather to give us our crop.

The overabundance of easy to get financing is credited with the downfall of the real estate market. The overabundance of properties to sell is credited with keeping the market at the current level. A gut check of any serious real estate investor comes to the conclusion that now is the time to buy. We are passed the point of panic in the country. We are passed the point of exploding forecolsures. Interest rates are starting on their way up. Those people with the backbone to be pruchasers now are going to come out like bandits.

Ask for abundance, but be careful what you wish for.

Todays Opportunity To Buy Real Estate Maybe The Best Time Ever

Interest rates cannot be any lower. The desperation of some sellers cannot be more profound. It is the time for all bottom feeders to unite. Unfortunately, buyers trying to take advantage of the best of all situations are trying to buy for even less to make it an even BETTER deal. I feel safe in saying that we will look back in a few months and a few years and realize that the best time to buy has already passed. Be the first in your group to buy a Dillon Valley East 3 Bedroom for $150,000. A single family home ready to move into for $300,000 and commercial prime space for $350,000. Everyone wants to be smart. Let me finish by asking -- who really thinks interest rates will go any lower? And who really thinks there will be more motivated sellers than now.

Is A Special Assessment or Cancer a Worse Thing?

Many large condo associations are facing special assessments. Unfortunately, no condo associations that I know of have enough money in their reserves. It is possible to hire a consultant that will let you know how much money a condo association will need in the future. That analysis will show that even a really good association is underfunded by as much as 80%.

There are 2 conflicting truths. First is -- that if you put $25,000 into your condo, your condo will be worth far more than the $25,000 invested. The Second truth is, not only in this market, but any market, 3/4 of the owners won't have the $25,000 to put in. With construction costs being at a low, now is the ideal time to complete much needed, deferrred maintenance. Even so, the 100 owners of a condominium complex would all rather go to the dentist than face a special assessment.

My advice is, don't let your kids grow up to be condominium managers. If you're on the side that wants an upgrade, have you entire project layed out if you want to have any chance of getting it passsed.

In our office, Kevin and Peter really have a lot of wisdom about this subject. Don't minimize the impact of cancer on a loved one or the human drama of a special assessment movement.

Short Sale Is A Dirty Word

We are now becoming experts in the arena of foreclosures. Many buyers appear that have the mistaken concept that a short sale is a great deal. A Short Sale is a negotiation with a lender before a foreclosure action has been completed. The lender theoritically would be interested in letting the property sell for less than the loan amount. In reality, some lenders are interested in a perfecting a deal at a lower amount.

What we are finding in Summit County is that lenders often won't fully negotiate on that short sale position until very late in the game. What all this means is that a buyer is far better off buying a property that has already gone through foreclosure or even better buying property from a seller that doesn't have a loan against the property that is larger than its value.

There have been 60 foreclosures in Summit County this year. 56 of them went back to the lender. That means the lender bought it for the value of their loan. In all those cases the loan amount was greater than what the property is worth in today's market.

Once the lender owns the property it becomes a REO (Real Estate Owned). Promptly that property is put back on the market through a real estate broker for an amount far less than that loan was.

Its a great time to buy a property that's an REO or from a seller that doesn't have a big loan, but avoid short sales if you possibly can because the lender doesn't negotiate very well until they have the property hanging around their neck.

Economic Observations Local

Writing this when its 90 Degrees in Summit County, there are several nuances to be highlighted. This is the first year in the last 30 that Lake Dillon has been full and there are no boats on moorings in the Town of Dillon and there are windmills on the top of light poles at the Frisco Marina. I-70 is totally jammed with cars coming up from the Front Range with people trying to get just a taste of the cool beauty that is Summit County.

Dillon has no boats on moorings because for the first time in Dillon's history there are not enough people who can afford to put their boat on the lake. The Town of Frisco, however, has hundreds of thousands of dollars to spend money on windmills designed for really windy places. And yet, the people of the Front Range have not lost sight of the fact that Summit County is the place to be.

Stay tuned. When things equalize out in the economy, Summit County is the place that people will want to be. There are people flooding into Summit County right now by the 10's of thousands just for this weekend.

Mid-Summers Blues

Spring started out with the promise of some really good real estate activity. The early summer before the 4th of July -- there was a serious stall in the market which was absolutely tied to the demise of the stock market and tied to consumer conference among affluent Americans. In the last 3 days the stock market has gone up, the interest rates have gone to the lowest they have been since they started tracking them in 1971 and the Russian Spys have been captured. Curiously, our market is all about consumer confidence and we are only a few days away from significant upswing in confidence. Enjoy the rest of the summer and fall because the bad days are behind us.