It seems everyone wants to get in on the action!  Everyone’s heard about the economic and housing crisis, the sinking home prices, and they all want to cash in by finding a steal of a deal.  Fortunately for my partner and me, the coastal North San Diego County real estate market where we do most of our business is not suffering as much as other areas.  Newer tracks that were built and sold at the peak of the market from 2003 -2005, that offered insane incentives such as highly risky loan products, are suffering the most.  More established communities and those with timeless appeal like Del Mar and Cardiff-by-the-Sea are faring far better.

One Buyer Chooses to Venture into Heavy REO Territory

After living in Carmel Valley for the last several years, one set of clients, a growing family with two young children, decided they needed a bigger home.  By surfing various internet real estate sites, they discovered that Chula Vista, an area with many newer tracks located in southern San Diego County, had been hit particularly hard by the housing downturn and offered a great opportunity  to find a big house at discounted prices.  That’s where we came in…

Sifting Through the Housing Rubble

When they asked for our help, we admittedly were wary.  REO’s and short sales are notorious for being hard to purchase.  It can take weeks or even months to get a response to one’s offer, and that’s just the beginning.  They may not even close.  But our clients were determined.  So, we sifted through pages of available listings until we came up with 6 that matched their criteria and seemed worth seeing.  After visiting them, our clients designated their first, second and third choices, and we were ready to write offers.  That’s when we began to discover yet a few more reasons why REOs are so challenging:

• many of these listings already had multiple offers on the table, one as many as 25!
• many of these homes had been so neglected by their owners, they were in horrible condition!
• some had even been stripped of every removable part like fixtures, doorknobs and switches!

Writing Multiple Offers

Unlike the San Diego Coastal real estate market, specifically, the Del Mar real estate market, concurrently writing offers on multiple properties is a normal practice and is not considered unethical in areas with many REO listings for sale.  We’ve always felt that this practice flies in the face of the covenant of “good faith and fair dealing” because there is generally no intent for a buyer to ever buy more than one house at a time. But, we did what we had to do.  So many of these listings already had multiple offers pending, chances were slim of any of our offers getting accepted.  Long story short, after an intensely steep learning curve, we successfully submitted a few offers and eventually got one accepted…. 

And The Waiting Game Begins…

(stay tuned for part 2)