Foreclosure,
An enticing sign for home sales
dallasnews.com
Number of foreclosed homes on market is still small, but area sales have 'grown drastically'
07/11/2003
By STEVE BROWN / The Dallas Morning News
The ranch-style house on Park Lane has four bedrooms, three baths, a slate floor in the den and a swimming pool out back.
But sales agent Bruce Town said what's gotten him "a ton of phone calls" from prospective buyers is the little sign out front: FORECLOSURE.
"When they see the 'foreclosure' sign, they think it's going to be a steal," said Mr. Town, an agent with Remax Premier Properties who's selling the house for the lender. "The previous owners had the house listed for sale at $550,000, and the bank has lowered it to $499,900."
The location of the house – at the corner of Park and Preston Road in one of Dallas' most affluent neighborhoods – says a lot about the woes of the local economy.
"Most of the foreclosed houses I sell are in the suburbs like Plano and Allen," Mr. Town said. "But now we are starting to see them in other areas, too."
There are nine other homes with "For Sale" signs out front on the same block of Park Lane.
So far, the number of foreclosed houses for sale in the Dallas-Fort Worth area remains small. There are about 1,100 such properties identified as foreclosures on the North Texas Real Estate Information Systems' database of more than 43,000 houses and condominiums for sale.
But researchers who track foreclosures guess that there are thousands of such forfeited homes in the pipeline.
"I think that estimate of 1,100 is very low," said George Roddy, who owns Foreclosure Listing Service. "In Dallas County alone, there are 400 to 500 home foreclosures some months."
So far this year, Foreclosure Listing Service has reported about 6,700 home foreclosure postings in the Dallas area. Typically, about 40 percent of homes posted by the lender are sold in the monthly foreclosure auctions.
"If you look at the actual number of postings, 81 percent are homes with under $200,000 in debt," he said.
Real estate agent Connie Zetterlund, who specializes in selling foreclosed houses, said her current listings range in price from $99,000 to $500,000.
"And they are all over town," said Ms. Zetterlund, who works for Coldwell Banker Residential. "It's not just one price range or area of town that's impacted.
"I have a lot of two- to three-year-old houses that the owners are losing," she said. "It's very sad."
Lenders who resell foreclosed properties are more savvy these days about pricing the properties, said Ms. Zetterlund, who's been selling foreclosed homes since the mid-1980s.
"These days you cannot steal them, but back in the 1980s, a lot of times you just made the lender an offer and they accepted it," she said.
"But the lenders figured out that helped ruin the housing market. Now they do their homework," Ms. Zetterlund said.
Her clients often require multiple appraisals and will only significantly lower the price of a foreclosed house after it has been on the market for several months.
Not like the '80s
"Even though foreclosure sales are picking up, it's still nothing like it was in the 1980s," she said.
Maybe so, but "it's grown drastically over the last couple of years," said agent Rusty Graham, who's been selling foreclosed houses exclusively since 1995.
"Good or bad economy, people always have financial issues," said Mr. Graham of Coldwell Banker. "Divorce, health, job transfers – things happen to people that are going to cause them to lose their homes."
He works with a team of a dozen people and currently lists more than 75 foreclosed houses on behalf of lenders.
"I've sold foreclosed houses as cheap as $500 and as much as $700,000," he said. "Our average sales price five years ago was running around $75,000, but now it's practically doubled.
"I'm seeing more middle- to upper-income people losing their homes," Mr. Graham said.
Many of the properties he lists for sale are in Mesquite, Grand Prairie, Rockwall and Rowlett.
"There are certain subdivisions that are heavy," Mr. Graham said. "You can tell it is close to a company that had a major layoff in the last six months or year."
Most of Mr. Graham's buyers are individuals, not investors.
And he agreed that just because a home has been foreclosed on doesn't mean it will trade at fire-sale prices.
"But it makes them easier to sell when people think that's going to be the case," Mr. Graham said.
'A demanding business'
Actually, there's nothing easy about selling foreclosed houses, veterans of the trade say.
"It's a very demanding business with handling everything from evictions to rehab and closing," Mr. Graham said. "There are not many agents willing to take on the workload."
But once they have established relationships with lenders, it can result in a steady flow of business.
"I have many banks and mortgage companies that I deal with nationwide," Ms. Zetterlund said. "But you work hard – some days I get 50 to 75 calls at the office."
There's also the unexpected.
Along with abandoned pets and houses full of belongings left behind, agents must coordinate repairs from vandalism on a regular basis.
The Park Lane house Mr. Town is selling is sporting a sheet of plywood after someone stole the front door.
"It needs some work to repair the damage that was done," he said. "Since it's on a half-acre lot, I've gotten a lot of calls from people who want to buy it and tear it down for a new house.
"It's a prestigious address right on that corner," Mr. Town said.
E-mail stevebrown@dallasnews.com |
