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| November 2007 »
 Quick Skim
Bargain shoppers are on the hunt for foreclosures, so get ready to help them find a hidden gem. But first, you might benefit from some pointers. After all, buying foreclosures can get tricky — whether you’re making the purchase at auction, through a bank, or from an emotional and financially-strapped home owner. In the new book Finding Foreclosures (Entrepreneur Press, 2007), real estate investor Danielle Babb and mortgage broker Bill Nazur take you through the complexities of buying foreclosed properties, from finding the best deals to avoiding common pitfalls.
Buy the Book
From the Book: 5 Ways to Get Good Foreclosure Deals
Foreclosure rates are spiking and brewing up a hot market for investors and buyers. To get the best deal possible, follow these tips from the authors:
1. Timing is everything. Borrowers often are given a chance to avoid foreclosure with a grace period, typically two to three months, to pay off the amount they owe. The borrower may opt to sell the property during this pre-foreclosure stage if they can’t make up their missed mortgage payments. This is typically the best time to strike a deal, as home owners are looking for ways to avoid foreclosure. Another prime time to buy: prior to an auction date.
2. Look in the right places. Follow the foreclosure trail. Title companies, banks, purchase money escrow offices, and credit unions can be good sources to find out about new foreclosures. Online services, such as RealtyTrac provide national information on foreclosures, broken down into such categories as bank-owned, auction, and pre-foreclosure. The Hudson & Marshall Web site has auction schedules and even lets you make bids online.
3. Know when to walk away. For properties that have been left vacant for any amount of time, it’s important to check for any plumbing or electrical issues, vandalism, foundation problems, and mold. Recommend that your clients spend money on a home inspection to ensure they’re not overlooking problems that would be expensive to fix. Even if the property’s price tag has
been steeply discounted, it still might not be the best deal.
4. Do your research. Before buying a foreclosed property, your clients should have the home appraised to get an accurate estimate of value. Also, they should ensure the title is clear and check for any liens — such as builder liens and taxes — that need to be paid off. This is public information and usually can be found at a county’s recorder’s office. Find out how much is owed on the home and make a list of everything that needs to be repaired, with an estimate of costs (add 10 to 20 percent to pad it). Now, you’re ready to make an offer.
5. Buckle your seatbelt. Foreclosure deals often move fast and require constant monitoring as properties wind their way through the process. Home owners who were in shock or denial or banks that have taken over ownership of the property may initially reject your offer. But don’t give up. Follow up is key — especially as an auction or REO time nears, they may change their mind. “The early bird definitely gets the worm in the foreclosure market,” the authors say. Remember, if it looks like a great deal, other buyers are undoubtedly looking too. Therefore, make your offer more appealing, such as by being able to close in 14 to 21 days. While escrow periods are usually 30 days, you can find some banks that can act faster.
Sneak Peek
“The owners of homes in foreclosure can be extremely frustrating to work with, but put yourself in their shoes. They may feel embarrassed, ashamed, or inadequate, especially if they have a family. They may feel like they have failed, and here you are, Ms. Money Bags, coming in to take their home from them for lower money than it is worth …. If you insult them, annoy them with phone calls, make them feel lower than they already are feeling, or treat them in a lesser way than you’d want to be treated in this situation, you are sure to lose the deal, not to mention kick someone while they are down.”
About the Authors
Bill Nazur is a licensed real estate professional in California, and has more than 20 years of experience as a mortgage broker, real estate finance specialist, and in sales and marketing. He’s worked for major lending institutions, such as Bank of America and Washington Mutual. Co-author Danielle Babb, author of Commissions at Risk (Kaplan Business, 2006), is also a California licensed real estate professional and a technology specialist in real estate.
Check back on Monday, Nov. 5, to read the authors’ responses to your previously submitted foreclosure questions.
Think and Grow Rich (Arc Manor, 2007)
By Napoleon Hill
— Courtland McPherson, Prudential Gammons Realty, Exeter, R.I.
 The Real Estate Agent's Business Planning Guide (Dearborn Real Estate Education, 1994)
By Carla Cross
— Helen Coen, ABR, Century 21, Carole White Associates, West Roxbury, Mass.
Made to Stick: Why Some Ideas Survive and Others Die (Random House, 2007)
By Chip Heath and Dan Heath
— Suzanne Karr, e-PRO®, Crye-Leike REALTORS®, Mount Juliet, Tenn.
Tell us what you’re reading. Send an e-mail to bookblog@realtors.org that includes the title of the real estate book you’re reading and the author, along with your name, contact information, and your photo.
 Here are the latest top selling books on real estate, according to Amazon.com:
1. Be a Real Estate Millionaire: Secret Strategies for Lifetime Wealth Today, By Dean Graziosi
2. The Pre-Foreclosure Property Investor’s Kit: How to Make Money Buying Distressed Real Estate Before the Public Auction, By Thomas Lucier
3. Rich Dad’s Advisors: The ABC’s of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss, By Ken McElroy
4. The Foreclosures.com Guide to Making Huge Profits Investing in Pre-Foreclosures Without Selling Your Soul, By Alexis McGee
5. Flipping Confidential: The Secrets of Renovating Property for Profit in Any Market, By Kirsten Kemp
6. Real Estate Investing for Dummies, By Eric Tyson and Robert S. Griswold
7. Flipping Houses for Dummies, By Ralph R. Roberts and Joe Kraynak
8. Complete Guide to Real Estate Tax Liens and Foreclosure Deeds: Learn 7 Days (Investing Without Losing series), By Don Sausa
9. Rich Dad’s Real Estate Advantages: Tax and Legal Secrets of Successful Real Estate Investors, By Sharon L. Lechter and Garrett Sutton
10. Investing in Duplexes, Triplexes, and Quads: The Fastest and Safest Way to Real Estate Wealth, By Larry B. Loftis
 The Big House: A Century in the Life of an American
Summer Home (Scribner, 2004)
By George Howe Colt
— Tammy Tanner, RE/MAX, Duluth, Ga.
 The Referral of a Lifetime: The Networking System that Produces Bottom-
Line Results Every Day (Berrett-Koehler Publishers, 2005)
By Tim Templeton and Lynda Rutledge Stephenson
— Doug Nunnally, ABR, CRS, FavoriteAgent.com, Fayetteville, N.C.
 Mainfest Your Destiny: The Nine Spiritual Principles for Getting
Everything You Want (HarperTouch, 1999)
By Wayne W. Dyer
— Joan Wilson, Prudential California Realty, San Diego, Calif.
 The Millionaire Real Estate Agent: It’s Not About the
Money … It’s About Being the Best You Can Be! (McGraw-Hill, 2004)
By Gary Keller, Dave Jenks, and Jay Papasan
— Barbara A. Berue, Keller Williams Main Line Realty, Bryn Mawr,
Pa.
Tell us what you’re reading. Send an e-mail to bookblog@realtors.org that includes the title of the real estate book you’re reading and the author, along with your name, contact information, and your photo.
Feng Shui consultant Christine Ayres, co-author of Sell Your Home With Feng Shui: A Complete Guide to Staging Homes for Quick Sale in Any Market (AuthorHouse, 2007), responds to your questions.
Q: How can feng shui help you to sell a home faster than using other design principles?
A: The intention of staging with feng shui makes all the difference. The focus is on the buyer. We make the home more welcoming to the buyer walking in and through the space, rather than creating an environment that is necessarily comfortable for the seller. The emphasis is on form — not function — and we do not create any overwhelming décor. Another point of difference is that in using feng shui we also enhance important life areas that give the sale a boost such as wealth, career, and the fame/reputation guas of the house. We look at the house as an energetic container for a sale and stage accordingly.
Q: The National Association of Exclusive Buyer Agents recently released a survey that found the majority of real estate practitioners say staging can distract buyers from seeing the defects and important aspects of a home. Do you think staging a home could be harmful to buyers?
A: I believe that proper staging emphasizes the selling points of the home. And it is important to remember that we are not selling furniture here, we are selling space. I think the “distraction” you mention can come when the house has been over-staged — that is too many pieces of décor and too many pieces of furniture. Then, we totally miss the dimensions, layout, and quality of the space as we are too busy looking at the décor.
Q: In following the bagua map, how can you best activate the buyer/wealth part of homes?
A: For the buyer gua, hang a wind chime up under the eaves on the front right corner of the house or place a flag on this corner of the home (especially good for cul-de-sac homes). If this front right corner happens to be the garage, a chime up inside the garage will also stir the energy to call in the buyer. For the wealth gua, think abundance. Expensive art, china, crystal,
or other higher end items can be placed here. Water equates with money, so representations of water or a fountain works nicely. Or you can use colors for wealth, purple, red, green, gold or silver, to tickle the chi of money.
Q: With buyers that have very outdated taste and truly don’t understand what features are important in an expensive house, do you have any suggestions of how to get it across to them that some changes need to be made to attract buyers? Also, what would you suggest are some easy, quick fixes that wouldn’t take too much convincing?
A: I spend time with the sellers in the beginning of our session explaining that now we are staging the home to welcome in the buyer, and we are moving them along to their next home. Therefore, if their personal taste is very prevalent in the house they may be limiting the market for their home. If they have been in the home a long time, this may take some gentle education about what the competition is like out there. Then, start with something simple that makes sense to them. Such as: removing objects behind the front door so that the door can open fully, placing a welcome mat out front that is as large as the door (double doors, double size mat) to make the entry as grand as possible, taking their name off the house if it’s there to make it easier for a buyer to not feel they are “trespassing” when coming to see the house. Also, recommend they pick anything up off the floor that blocks hallways, pathways, and circulation through the house, etc. Keep it simple, get them involved, and then work up to the larger changes.
Q: Are there any good feng shui colors to paint the front door of a house to gain some curb appeal and draw buyers in?
A: You can generate sales with great front doors. The main point to remember with the front door is that you want it to pop and stand out from the siding and trim. If it blends, or is the same color as the trim, the chi just bounces off it and no real entry is created to pull in the buyer. You want it to be dramatic with a bolder or brighter color than the siding and trim. Red doors are fantastic, but don’t always work with every house. For example, if the house is white with green trim, try a bright teal blue (which has the green in it). Or if you have a pine house, use a cedar stain on the door to make it stand out.
Q: If you only use feng shui in one room, will you lose its effect by not using feng shui for the entire house?
A: Good question! You will not lose the effect if that one room is the room of first impression — the first room you encounter when you enter the house. This is the room that sells the house. It is the one in which the buyer decides whether or not they like the house, and this is only confirmed as they move through the house. The room of first impression sets the tone and energy for the entire house. If this room is welcoming and has good feng shui you are off to a great start. It is one of the most important rooms of the house, and we devote an entire chapter in Sell Your Home with Feng Shui to selecting the best room, directing the buyer there, and setting up a welcoming furniture arrangement.
Q: Is there any must-have items you would recommend keeping on hand to stage a home with feng shui?
A: In our book, we include a chapter on preparing your feng shui staging kit. It includes items such as welcome mats, red candles, a metal dish for your business cards, wind chimes, and a runner rug. We list about a dozen inexpensive items plus a few for staging a vignette in an empty house.
Q: Is it expensive to use feng shui to stage a home?
A: Definitely not. The vast majority of changes made will involve the furniture, art, and décor present in the house. An example would be moving a couch to open up a pathway to the window with the view. Another is placing the practitioner’s cards in the Career area. In most cases, the expense will be minimal such as purchasing a wind chime or a flag.
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