Highlands NC Real Estate Blog – Highlands Properties

Foreclosures, Foreclosures, Foreclosures. Everyone wants to buy foreclosures!!  To be sure, there are many great deals out there in bank owned properties. The larger banks typically package them up for bigger asset purchases but more recently have let them go to auction companies for disposal. Buying any foreclosure or bank owned property does not make it a wise investment. Highlands Properties, a Highlands NC Real Company has worked with customers since the market downturn to help them identify the best buys in the Highlands Cashiers area of western North Carolina. We have over 23 years of experience in the general real estate market but this new era of bank owned properties made us have to learn the market in’s and out’s all over again. What we found over the last two and half years might help you make a better investment decision in your market. Our market is primarily one of second homes and discretionary spending but we have found that the more aggressive the buying was before the downturn, the more likely it is that the bank has too much loaned on a property.

We have found that the best values are many times found with smaller banks who are willing to discuss short sale options. In this market, people who have yet to let their properties go back to the bank, generally indicate a loan to value ratio that deserves a closer look. In other words, many people who were entirely upside down, let the banks have their properties long ago. The later in the cycle of this downturn a property is relinquished to the bank, the more likely that it is a good value. So how do you get the best deal for you and the bank. Negotiate before the courthouse steps. Don’t wait until it gets auctioned off on the courthouse steps. Many banks will not negotiate as hard once it enters into this phase. Check with your local broker to find properties that have “motivated” sellers. Check public records for original mortgage amounts and offer amounts at 60 to 70 percent of the anticipated remaining loan amount. Many times banks, (especially ones that have real asset managers that will talk to their customers), will negotiate a little harder to keep expenses lower and not allow the property to enter the foreclosure notice process. It saves the bank money and generally lets you get a higher quality property for thousands of dollars cheaper than you might get if the bank were to bid the face amount of their loan at the courthouse.

The bottom line is that we have found that customers who work with a broker prior to a property going to the courthouse steps are twice as likely to obtain a better property at a better price then if they wait for the bank to actually own the property. Seventy percent off of these type properties is generally better than fifty percent off of a bank owned property. Can you find a deal in bank owned properties? The answer is certainly yes, however you might want to try and make a deal prior to the bank actually owning it.

It is hard to find many things that the government can do better than the private sector other than defend our country. The government’s involvement in the banking industry is just one more example of this poor tract record. “Too big to Fail” was the mantra that Congress shouted in front of every camera that would agree to roll the tape. They somehow thought that a highly regulated industry with more attention than Justin Bieber would somehow do better with even more oversight. The logic was that the banking industry needed more government involvement and the more government you have, the safer we will be. Wrong!! The government now has created a bigger problem. Banks have now become; Too Big To Deal. Prime Example: Bank of America, employing thousands of people, has become so big and yes regulated, that you can’t find a person willing or may I say, able to negotiate loan modifications or short sales. The result is thousands of homes which could be sold at a discount to avoid foreclosure are proceeding to the courthouse steps. The banks are actually making less than they would if they actually had dialogue with the private sector. These “Too Big to Deal” banks make it impossible to discuss options to avoid foreclosure other than set government plans. Smaller banks hire asset managers who actually talk to their clients. What a novel idea!! Instead we somehow think the FDIC is going to fix banks by putting pressure on institutions to conduct business properly and prepare for the unexpected. Great advice from a government agency who was bankrupt itself. Bottom line, The government was involved in the banking industry prior to 2008, they didn’t stop the problem then; why would doing more of what didn’t work solve anything. They were too big to fail and now they are too big to deal. You’re not convinced? Try this. If you have a mortgage with any of the too big to fail banks, try to get to someone who actually can make a decision on selling your home for $10,000 less than you owe. I would love to hear from anyone who can do this with less than 10 phone calls. I would caution you; they can find you quicker than you can find them. To Big To Deal Banks, the next thing we will try to regulate. I am just glad that the government isn’t getting involved in health care.