Showing Sad Houses - Short Sales and Foreclosures in Tucson
November 16, 2007
I spent some time this weekend with a Buyer who really wants a deal. For him, it isn’t about finding the perfect house, it’s solely about the right numbers at the right time.
Good deals, we can find. A quick CMA for each of the ten biggest subdivisions on the side of town with the highest months of inventory, and voila. There are homes listed for $10-20 less per square foot than the recent solds. What’s wrong with them that they haven’t already sold?
They’re short sales and foreclosures.
Time out for definitions:
A short sale is where the owner can’t sell the house at a high enough price to cover all the loans on the house. The lenders will come up “short.” The Seller walks away from the sale without a penny and usually with a big hit to his credit rating, and the lender gets shorted on repayment of his loans. Some people are forced into short sales because they can no longer afford the payments, are moving, or must otherwise get rid of the house. Short sales are often a precursor to…
Foreclosure. This is when the bank takes back the house and auctions it off at a Trustee sale. The owner looses his home, his credit scores go kaput, and the lender stands a good chance of not getting all of their money back at the Trustee sale.
Short sale and Foreclosed houses are side effects, the product of someone’s misfortune, terribly sad places to visit. Because the owner won’t make a penny, they tend to neglect the house, or otherwise leave it in poor condition. The owner has no incentive to clean or fix the house in any way.
Often, other than being left unclean, there is stuff in the house: remnants of the owner’s old life, kid’s toys, clothing, items strewn about. Did the bank take the house and change the locks before the owner could move everything out?
And then there are the houses where things are missing. Things like, oh, the kitchen sink. The range and the oven hood. Ceiling fans and light fixtures. The dishwasher, the garage door opener. Carpet. Blinds. Sometimes an owner in foreclosure will take whatever isn’t nailed down (and some stuff that is) in order to salvage what they can from the old house.
Showing these homes is incredibly sad. The owner’s story is laid bare in the condition of the house that they leave behind. Yeah, I can find you deal, but you better have the stomach to visit these houses one after the other. My last buyer didn’t. We’re on to new construction.
Other Information That Might Be Helpful
- Buying Short Sales and Foreclosed Homes in Tucson (April 1, 2009)
Been discussing this quite a bit recently with my home buyers. Two very different situations if you’re trying to buy short sales and foreclosed houses in Tucson.
A foreclosed home - also called bank owned or an REO property - is one where the lender has completed the foreclosure process and now has taken it back [...] - The Chances A Short Sale Will Actually Sell (May 5, 2008)
I’ve got a buyer thinking about making an offer on a short sale property.
Remember, a short sale is where the owner owes more on the house than they can sell it for. They’re most often incredibly long, frustrating sales, and often, the sales never actually complete. You have to get the lender to agree to [...] - How Many Short Sales in Tucson Actually Sell? (March 3, 2008)
We’ve talked briefly about short sales before. A short sale is where the Seller isn’t going to make enough money at the sale to pay off all the loans on a property.
If you’re trying to buy a short sale property here in Tucson, be ready to be patient. There can be lots of hurdles to [...] - Comparing the Short Sale and Foreclosure Markets (April 3, 2009)
Fun with numbers -
# Short Sale Homes on the Market today: 1820
# Short Sale Homes Sold in March: 143
That’s a 12.7 month supply of short sales in Tucson. Which means about 1 of every 13 short sales actually sell.
# Foreclosed Homes in the Market today: 1614
# Foreclosed Homes Sold in March: 417
That’s a 3.9 [...] - Proposed Rule Change for Short Sales in the Tucson MLS (December 20, 2008)
Landed in my inbox today, a proposed rule change, if I understand the message correctly:
MLS Rule Change for Short Sales
Section 3.18- Short Sales:
As used in these rules, short sales are defined as a transaction where title transfers; where the sale price is insufficient to pay the total of all liens and costs of sale; [...]
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Metaphysical question.
Do you feel that the sadness transfers with the house?
Metaphysically, I think houses have a long memory, but are more capable of elective forgetting than humans are. You can take the sadness out of the house, but the human can’t take the memory of the sadness away as quickly. Perhaps. In a metaphysical sense.
You are correct, complete sadness. I grew up working in the family mortgage bank. At the age of sixteen I was knocking on doors of deliquent payers and requesting payments. I started doing evictions at 21. On December 23rd of 1992 I received a call from our HUD foreclosure contact, he wanted me to secure a house on Princeton Ave that day, two days before Christmas, accross the street from my Grandmas old house!
There was no talking him out of it, he wanted done to close out his year and he was heading on vacation. The occupants had a long history of being difficult, they were drug addicts with irrational behavior. We knocked on the door, informed them they had 2 hours to get a truck and we would help load, I even offered to pay for the truck. I was sick to my stomach evicting someone right before Christmas.
We left and came back in two hours, they had done nothing, the sheriff let my team in and they started moving the people out of the house, very carefully not to damage anything and stacking everything on pallets outside. I was in my truck watching.
My knowledge of the ex-homeowner was they were mid-twenties, irrational & had no children when they purchased the home six years prior.
The last thing they brought out of the house was a Charlie Brown looking Christmas tree. As soon as they hit the porch with the tree, two little kids probably 4 &5 ran out screaming “don’t take our Christmas”.
I snapped, 6′4″ 210lbs of shaking, balling man. I was sad for the kids, angry with the parents. Inferiated with HUD. Needless to say it completely ruined Christmas. 15 years later I still wonder about those kids, and can’t make it through Christmas without thinking about them and what I had to do. I look at my kids and think how fortunate they are.
In my market, Flint MI, 40% of the homes on the market are foreclosures. Why can’t the listing agent or clean out team take down childrens artwork? It is heartbreaking to see.
Where are the kids now? Why did the parents not care enough to take it? If you have nothing, isn’t a picture of a rainbow your kid drew priceless?
Buddy - that’s a terrible story. Thanks for reminding us that there are real people behind every sad house.
[...] talked briefly about short sales before. A short sale is where the Seller isn’t going to make enough money at the sale [...]