When considering buying a trustee sale, you have to wonder, is it better to buy after the property goes “back to bene”?

With inspection contingencies and title insurance included on a regular sale, the risks are lower, but you will probably have the burden of additional comeptition on an open-market sale.

What about price?

We’d like to learn something from the opening bid amounts – are they accurately depicting the property’s value, or just a wild guess based on what’s owed?  Will the pricing get better, later?

Does the price get better, or worse, once they hit the open market?

Here’s a review of 100 detached REO listings from Carlsbad to Carmel Valley, listed since 6/1/09:

Listing Status:

ACT: 16

CONT: 7

PEND: 25

SOLD: 52

They aren’t having much trouble finding buyers – how’s the pricing?

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Relationship of opening bid-to-list price:

List Price more than 20% higher than Opening Bid: 13

10% to 20% higher: 18

Less than 10% higher: 21

Less than 10% lower: 20

10% to 20% lower: 13

More than 20% lower: 15

If almost half of the failed trustee sales end up listing for less, should we just wait?  Yes, especially if we can determine which banks/servicers are dumping. 

Aurora and WaMu are the ones cutting 20% or more off their opening bids – if you’re thinking of buying one of theirs at the court house steps, you may want to re-evaluate.

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Of the 52 solds:

Closed over list: 33

Closed at list: 3

Closed under list: 16

The euphoria of paying over-list has dwindled a bit.

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How did buyers finance the 52 solds?

VA: 2

FHA: 4

Conventional: 29

All-cash: 17

There’s still a heavy influx of capital being used to buy houses, one-third of the sales were all-cash.  Are the banks showing their preference?  Probably, and a reason to try to be a cash buyer – and once there, you might as well consider the trustee sales too.

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Jim the Realtor
Jim is a long-time local realtor who comments daily here on his blog, bubbleinfo.com which began in September, 2005. Stick around!

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