Foreclosures are the Price Leader in the Frederick Real Estate Market
There are many foreclosures on the market in Frederick County right now, and every day we see more REO's listed. We're seeing some incredible deals. I've been involved in 6 offers in the last 3 weeks and in all 6 there were competing offers.
Foreclosures in the Frederick real estate market are the trendsetters in two ways:
1. REO properties establish the low point in the market. For the last couple of years the low point has been moving steadily downward, but now we're seeing that change. Having multiple offers establishes a fixed low point. You can't go lower when you have competing offers, ending in either the list price or above list price.
2. REO properties will get sold before most homeowners will be able to sell their homes. Simply because of the price point.
There are two general ways that a bank goes about selling their REO's:
1. The bank starts with a BPO, a brokers price opinion, which is based on the comparative market. They list the property at that price, then systematically lower the price over 90 days until it sells.
2. The bank lists the property about 20%, and we're seeing even 30%, below market, and then they usually get several offers within 1 or 2 weeks, creating a bidding war. Our experience is that the buyer who offers more than list price will get the prize. Unlike a lot of homeowners, who price their home high, leaving room for "negotiation", then watch their home languish on the market, riding the market down, banks are not wasting time. 
The key to successfully purchasing an REO property: Banks are leary of buyers who can't make it to settlement, so they are vetting their financing (like only a bank can do), requiring the buyer to be prequalified by their own lender. 
The buyer is free to get the lender of their choice, they just have to prove their ability through the banks in-house financer. Here is the wording we received from Chase that spells out what they are looking for:
"The higher the price & down payment the more attractive your offer becomes. The bank will accept escalation clauses. The earlier the closing date, the more attractive the offer is. The settlement date must be no later than 45 days from contract ratification date. Do not use the 28, 29, 30, or 31st as your closing day."
If you're looking for one of these deals in the Frederick real estate market, then be ready to act quickly when you find one. This is truly competition. Have as much money as you can for a down-payment, have all you financial documents ready to submit to the in-house lender, and make sure your agent is experienced with the REO market in Frederick.
Here is one of those sweet deals that just came on the market: 204 Old Island Court in Walkersville
This 4 bedroom, 3 bath, 2540 s.f. home is priced at $299,900. It's assessed at $449,000, and in May '05 it sold for $495,000. In 2001 it sold for $298,000, so what we're seeing is 2001 pricing. To see more details about this home, including several pictures, follow the link to 204 Old Island Court.
To see more great REO's give us a call: 301-831-9947 Or visit our website:
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The Highland Real Estate Group
Chris & Karen Highland * Frederick County MD Real Estate Agents
Specializing in Frederick County Real Estate
301-831-9947
Real Estate Teams, LLC
isell4u2@msn.com
Pictures of Frederick