Uncle Sam's bailout of Fannie Mae, Freddie Mac from the trenches;Cleveland Ohio realestate

As a small broker in Cleveland Ohio my impression "from the trenches" of this latest government bail out is definitely a different perspective. What I saw in the industry before the Fannie Mae Freddie Mac bail out of the bank owned properties were selling for pennies on the dollar. It was like the wild wild west in real estate. A great big give a way! This had a huge effect on the regular market. The inner city and the first ring of suburbs are the ones that have suffered the most. High end markets are not feeling this as badly as our middle class properties. High end markets have suffered some losses in value but it appears that it is still moving along unlike the lessor priced properties. Why would someone buy a home on the resale market if it wasn't hugely discounted like many of these bank owned properties. The answer is few were. You could buy a double for 80k or less and put a few thousand dollars into it and end up with a huge equity savings. I have seen some of these bank owned single family homes in very good condition. You will see that they were on the market before the people lost their home. Then when the bank takes it over they put the property up for half the price. I have seen banks turn down offers on these properties only to turn around and put them up for far less than they would of made. I personally have been involved in three of these recently. The new buzz word in real estate is short sale. I have been doing short sales for 24 years. Sometimes you work out a deal but most of the time you get caught up in a bureaucratic web of who's on first base who's on second. Half of the people presently employed in the loss mitigation departments have no real estate background. They don't understand the dynamics of the industry. They just do what they are told and carry a huge work load. Since the bail out any bank owned property that was listed has had a really hard time getting answers on offers. I have had an offer in on one for over a week. Before the bail out anything in escrow seemed to be tied up. Now that the bail out occurred the properties that are in escrow are all getting cleared off the books and the deals appear to be set to close. All the brokers that I know who work the REO market are complaining that the listings are all dying out. Their sources of business continually keeps changing. Maybe this is a good thing! Maybe the slow down in the marketing of these bank owned properties will give the regular market a chance to catch up. I do know that "from the trenches" this last week made the phones stop ringing. It is the end of September and we have a long winter a head of us in Cleveland. Making a living in this continually declining environment has never been more challenging.

The best time to buy in Cleveland Ohio

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Some good news in The Cleveland Real Estate Market

I have never seen such opportunity to get into ownership as I have seen in this recent market. If you have ever dreamed of becoming a land baron this is the time to make your dreams a reality. If you have a stable income, good credit, some cash to work with and the ability to fix property it is time for you to get off the bench! The bank owned properties are selling for a substantially lower prices than normal resale properties. You have to be ready to replace torn out plumbing, update electrical and probably replace the furnace and hot water tank. Other than that some of these homes have really nice interiors. Years back when a bank owned property came on the market it was pretty beat up. With the pace of foreclosures and people just simply giving back their homes it has become and incredible opportunity for the wanna be investor. Some words of advise though, don't bite off more than you can handle. I have seen some really good people take on too many properties or extend themselves to far out just to find themselves in the same boat as the people they hoped to profit from. http://sandymaline.blogspot.com

Ohio officially designated as Declining Real Estate market

As of April 1,2008 the State of Ohio has been labeled as a declining market. This is across the board for the whole state. I have been told that the banks are now considering your real estate property values are now 7% lower than they were last year. This is an average. If you are in a more volatile market such as Cleveland proper you may be looking at lower even values.What does this mean to you? If you are using a line of credit on your home you may be hearing from your bank soon. They are very likely to lock your line at its present loan amount and lower your limit to what you have presently extended on it. If you are selling your home, the loan qualifications just got tighter। If you are an investor looking to make a good deal in this time of opportunity you will need more cash out of hand to purchase. Is this good? Not really this is going to cause more problems. Instead of the banking industry looking to take advantage of this market and find a way out they have just buried us into a even harsher environment. http://sandymaline.blogspot.com

Cleveland Real Estate Crisis

I may not be a economist, but I am in the trenches selling real estate in Cleveland. I have never seen so many vacant and foreclosed homes in my 23 years of selling. I am a full time agent and this is my only form of income. The market is brutal. We need to reinforce rules of the industry more than ever before.
It is also very important to understand that there are two markets out there. The foreclosure market where you may get a really great deal or end up with a money pit. Many of these foreclosed homes have been sitting vacant for years. The plumbing has been ripped out. Electric has been vandalized. When you buy one of these you don't really know what you are getting yourself into. If the property has sat through a winter with no heat it is no telling what hurdles you will face getting the property to good condition.
The other market that is out there is the lived in resale that has been cared for and updated. Many of these are in absolute mint condition. These homes are selling! They just aren't getting 2005 prices!! If you buy one of these homes you are not missing out on the deal of the century. You are getting a home in prime condition that hasn't increased in value over that last 3 years. Maybe it even decreased as much as 10%. The important thing to realize is when the market rebounds. Historically values start to increase again. So whether you are buying as fixer upper that you will put thousands of dollars into or getting one that is in prime condition you will still come out ahead in the long run.
The other dilemma is selling a home in this market and then buying. If you are buying a bigger home you will take a small loss on the selling end of your home but you will make up for it on the purchase end. Like transferring stock at a down period but purchasing one that has a greater opportunity to increase in value.

It is a tough market. Hopefully all the part time nonprofessionals will get out. Real Estate is still the best investment. You can live in it,write off the interest and taxes, and earn money by paying down your mortgage and during times of inflation your value grows.

Sandy Maline