Non-Traditional Foreclosure Contracts & Bank Addendums

There is no such thing as "standard operating procedure" when it come to Foreclosure Contracts. Every Asset Management Company and every Bank has their own unique policies and procedures ... and the Foreclosure Sales Contract is likely going to be their way or the highway.

It is typical here in Northern VA that the initial purchase offer is submitted using the standard local contract and after conditional (oral) acceptance by the Bank that a REO Addendum will follow. The Bank's Counter Addendum will supersede the terms in the local contract and while a majority of the Counter Addendum is consistent with the local contract ... there are some critical differences. The Bank may be selling properties in all 50 states and they want a contract document that they fully understand and are 100% comfortable with the terms and conditions. It is not uncommon for the Bank to demand that there be NO/ZERO changes or alterations to the Bank Addendum ... regardless of how minor or insignificant.

Realty Times Article: Watch Out For Nontraditional Foreclosure Contracts
"Your best offense is a real estate professional that has navigated
such waters and can help you miss any pitfalls along the way."
Realty Times, M. Anthony Carr - January 2007

Having a Buyer Agent that is familiar with both the sale and purchase of REO/Foreclosure properties can be an important factor in a successful foreclosure transaction.

John Thompson
Samson Realty

VA REO Listing Agent - VA Foreclosure Buyers Agent

The Bubble Has Burst

Side Note: I have left a couple older posts here on the Northern VA Real Estate Blog mostly for historical reference.

Back in late summer 2005 the BOOMING Northern VA Real Estate Market echoed a couple little blips on the local housing market radar. During the end of August, Hurricane Katrina hit New Orleans and the country was riveted by the disaster in both terms of property damage and human pain and suffering. There was clearly an abrupt slowdown in what was expected to be a Labor Day surge in real estate activity. Here in Northern VA, we have never recovered!

The last quarter of 2005 the local market just ticked along at a progressively slower pace and the days of multiple offers and homes selling before a For Sale sign could go up ... were gone. We had actually entered a "fair market" where buyers and sellers were on progressively more equal footing and by the Spring of 2006 average Days On Market were more in the 60-75 Day range. I would consider a market that averages 60-90 days on market to be the best for all concerned .... agents, buyers and sellers. Seller's can list there home with confidence that a willing and able buyer will be produced in a reasonable time period and Buyer's can take their time and sleep on their home purchase decisions without undo pressure to make an immediate decision.

The Summer and Fall of 2006 were highlighted by those that were predicting that the Bubble was Bursting and those that were painting an optimistic Slight Correction philosophy. Of course, the media jumps on the bandwagon of any doom and gloom story and took every opportunity to instill fear into the market ... sometimes a self-perpetuating strategy. Not trying to blame the media .... but Happy Homeowner stories just don't generate ratings like Homeless Family lost everything in the crashing real estate market.

I was reading news articles and blogs and seeing TV News forecasts that the housing market was in trouble back in 2001, 2002 and 2003. So while some may claim to have read the tea leaves correctly many others were just eventually right after 5 years of being dead wrong.

As for myself, I was a big believer in the housing boom with a dose or two of caution and I also was quick to see that times were changing and have attempted to adjust my personal business marketing to match the current market. I began to seek a share of the Foreclosure Market in mid 2006 which put me way in front of most real estate professionals ... but not quite far enough in front ... to fully capitalize on the Real Estate Owned (REO) potential.

To make a long story short and leave plenty of fodder for future blog postings ... the Bubble finally did Burst. The Bubble leaked air for many months but eventually near the end of 2006 the leak expanded and the inevitable Burst occurred.

More to come.

John Thompson

Northern VA Real Estate - VA Foreclosure