Foreclosure sales in Sequim and Port Angeles for the calendar year tell an interesting story, especially if you are retiring and planning to buy in Sequim or Port Angeles.  Clients from out of state periodically ask me if there is a good deal to be had in the foreclosure market.  We all hear stories about how someone somewhere bought a mansion for pennies on the dollar.  So the question is legitimate.  “As a retired professional moving to Sequim, can I get a beautiful custom home with a nice water or mountain view at a garage sale price?”  I’ll answer this question about foreclosure sales with solid sales data right here.

Foreclosure Sales

Foreclosure Sales

Theses foreclosure sales are revealing information when compared to what is happening nationally or around other areas of the country.  RealtyTrac, released its Year-End and Q4 2010 U.S. Foreclosure Sales Report, which shows that foreclosure homes accounted for nearly 26 percent of all U.S. residential sales during the year, down from 29 percent of all sales in 2009 but up from 23 percent of all sales in 2008.  In Clallam County we had a total of 85 foreclosed homes above $100,000 in 2010, and that represents 13% of the total homes sold in Clallam County above $100,000.  But less than 1% of the foreclosed homes are what most retirees are buying, at least the retiree clients that I have been working with over the past three years plus.  Obviously, some retirees undoubtedly are buying some of the lower priced homes, but Sequim attracts many retired professionals who want homes priced above $300,000.

When I look at homes that were bank owned and previously foreclosed upon by the banks in Sequim and Port Angeles (foreclosure sales), I see a pattern that has great relevance for retired professionals.  The vast majority of foreclosure sales were in the $100,000 to $300,000 price range.  And in Port Angeles there were about twice as many homes as Sequim foreclosed on below $200,000.  Housing is cheaper in Port Angeles, and there are more lower end homes being foreclosed on.

Foreclosure Sales

The nice homes that my retired clients want to look at are almost always above $300,000, and as you can see in this chart, there have been very few foreclosure sales above $300,000.  In all of 2010 there were only 5 homes above $300,000 foreclosed on in Sequim.  It is highly likely that these were not water view or mountain view homes, and probably not on a lot in an area that retirees would typically choose.

This affirms what I have been telling my clients, that the best homes at the best prices for retired professionals who want a beautiful custom home in a nice area are current listings for sale but not foreclosures.  Foreclosure sales are just not where the best homes are found in this small real estate market.

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How can you find Sequim foreclosures?  The Clallam County foreclosure market, including Sequim and Port Angeles is chaotic at best, but I’ve created several resources for you and they are all free.  Having practiced as a real estate attorney for 20 years and having done many foreclosures myself as well as represented many clients in purchasing foreclosures, I know what resources are available and what you as a buyer and investor need.  I also know what fees and costs can be compromised, and I know precisely how to negotiate the best possible price.

If you want to buy a foreclosure, may I suggest you use these resources online, and then do the next logical thing:  ask me to represent you as your Sequim Buyer’s Agent.  I cost you absolutely nothing, because the selling bank pays my fee even though I represent you against their best interests.  I love that, and my clients love that too.  Okay, let’s get to your free online resources for Sequim foreclosures.

Sequim Foreclosures

Sequim Foreclosures

I have a site I designed to make it easy for you to search for listed Sequim foreclosures, which are called REO’s.  These are foreclosures that are back in the bank’s ownership and have been listed in put in the Sequim MLS and the Port Angeles MLS.  This site pulls up the foreclosures that are listed in the Northwest MLS and are foreclosures.  The site is Sequim Foreclosures.  You can also just click on the above image.

Sequim Foreclosures

If you search my blog, Sequim Real Estate Blog, with the phrase foreclosures, you will find many articles, videos, and links to Sequim foreclosures.

1. Are Sequim Foreclosures a Bargain?

   Sequim foreclosures may not be the best values right now and using the online Sequim MLS will be your best bet for finding the ideal home at the best price. …

2. Is Your Sequim Home in Foreclosure or Close To It?

   Foreclosure Process in Sequim Do you own a Sequim or Port Angeles home that is now in foreclosure or just a month or two away from the foreclosure process? …

3. Looking at Sequim Foreclosures

   Jun 20, 2010 … I’ve showed several Sequim foreclosures recently to several clients. One of these properties is a nice five acre parcel in a great area, …

4. Foreclosure Process Defective

   The foreclosure process of many homes around the country is being challenged because of allegations of wrongful procedures by financial institutions. …

5. Foreclosures of the Rich and Famous

   Foreclosures are not just hitting “average folk.” Even the rich and famous … The foreclosure saga of Ed McMahon, 85, Johnny Carson’s former “Tonight Show” …

6. Foreclosures

   As a real estate attorney who handled many foreclosures and short sales, and now who represents buyers in short sales as a real estate agent, …

7. Short Sales and Foreclosures

   Sequim Foreclosures, Port Angeles Foreclosures, and Short Sale Opportunities for Buyers …. in utah and your post on Sales and Foreclosures looks right on! …

8. Port Angeles Foreclosures

   The following foreclosure database is a subscription service I pay for, but I offer it to you here at no cost with the permission of the largest foreclosure …

9. The Truth About Buying Foreclosures

   When we speak of a foreclosure, we are referring to a note and need of trust which is in default. The note is the evidence of the debt, and the deed of …

10. Foreclosures, Short Sales, and Credit Scores

    Apr 25, 2010 … What effect does a foreclosure or a short sale have on your credit score? Negatives on a credit report are scored by three factors: recency …

Search for your Sequim foreclosures and then email me at chuckmarunde@gmail.com or call me anytime at 360-775-5424.

Sequim foreclosures courtesy of Chuck Marunde.

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People ask me if there are some great deals in Sequim foreclosures or Port Angeles foreclosures.  The real estate market in the Sequim area is different than many other areas of the country, and that is true with foreclosures, too.  The foreclosure market here has been chaotic at best, and a disaster at worst.  I talk about Sequim foreclosures in this short video.

Sequim Foreclosures

Sequim Foreclosures and Good Deals

Properties that have been foreclosed on are listed and put in the Sequim MLS, so there is no need for a special database to search for Sequim foreclosures.  The question some people are asking is whether there are any good deals (i.e. steals) on foreclosures between the time the loan goes into default and the time it is sold at the courthouse and gets listed in put in the MLS?

The answer is a clear and unqualified, “No.”  No one I know has purchased a steal or any kind of incredible home at an extraordinarily low price.  Not during the time I practiced law as a foreclosure attorney, nor as a real estate agent or broker in the entire Sequim and Port Angeles areas.  Surely, someone somewhere will know someone who knows someone who got a $125,000 home for $85,000 and only had to put another $12,000 into it to make it inhabitable.  Those kinds of deals are very rare, so rare that I don’t even know anyone who knows anyone who has bought any cheap Sequim foreclosures.  I know people in Vegas who have, but not here.

Sequim Foreclosures and the MLS

I believe some of the best opportunities right now in this market are found by motivated sellers who want to sell their home to move closer to their children and grand kids.  Want to buy a $775,000 home for a $90,000 discount?  That home is probably owned by a retired couple who want to move closer to family in California or Texas or the east coast.  But that home is not a foreclosure.

Sequim foreclosures may not be the best values right now and using the online Sequim MLS will be your best bet for finding the ideal home at the best price.

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Clients often ask me about Sequim foreclosures and whether they should be looking for a good deal among the Sequim foreclosures or the Port Angeles foreclosures.  I looked up all the foreclosures this calendar year (from Jan 1 to Oct 22, 2010).  We’ve had a total of 404 foreclosures as evidenced by the “Notice of Trustee’s Sale” documents that have been recorded.  This includes foreclosures in all of Clallam County.

Sequim Foreclosures

Sequim Foreclosures Not So Many

The number of Sequim foreclosures is a much small number.  A Notice of Trustee’s Sale must be recorded part way through the foreclosure process.  The beginning of the foreclosure process is the issuance of a Notice of Default, but in Washington that document isn’t recorded, so there will be more foreclosures than represented by the number Notice of Trustee’s Sales recorded.  But that is offset by the fact that some Notice of Trustee’s Sales are recorded more than once, and there are also Discontinuances (termination of the foreclosure).

Sequim Foreclosures Not for Retirees

This means that the actual number of Sequim foreclosures is a small number, perhaps 50 homes.  Can retirees find great deals in this inventory of foreclosures?  Not really.  The many clients I have been working with over the past several years have not found a nice home in a good area at a great price among the Sequim foreclosures.  Trying to find a foreclosure you would want to live in and trying to negotiate with a bank REO on the east coast is a bit like entering a Twilight Zone movie.

There are also many problems looming in buying a foreclosure because of the legal problems with the bank foreclosure process.  See my earlier article at Sequim Foreclosures and Problems.

I don’t list foreclosures, but I do represent clients as a Sequim Buyer’s Agent or a Foreclosure Buyer’s Agent.  If you do find a foreclosure you want to buy, why not use a retired real estate attorney who understands foreclosures intimately and who is a Sequim real estate broker?  Email me or call me on my cell phone.  Sequim foreclosures are not necessarily the best buy for retirees but if you find one I would love to represent you.

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The foreclosure process of many homes around the country is being challenged because of allegations of wrongful procedures by financial institutions.  The federal government is conducting an investigation into Ally Bank’s foreclosure process, and several large banks have put a stop to foreclosures while they examine their own foreclosure processes.

Foreclosure Process

For Buyers who are thinking about buying a foreclosure, this could turn into a nightmare scenario.  As a Realtor I don’t list foreclosures, but I do act as a Foreclosure Buyer’s Agent, and in that capacity I owe my clients full disclosure on the state of the foreclosure market and the risks inherent in buying a foreclosure.  The process to foreclose a property is a statutory process in Washington [RCW 61.24].  When I was still practicing real estate law, I created a detailed checklist for the foreclosure process, and as you can see from this foreclosure process checklist, it is quite detailed and cannot be compromised.  [Read my article entitled  The Truth About Foreclosures and the foreclosure process.]

Foreclosure Process Under Investigation

The investigation into the bank foreclosure process is the result of revelations about how foreclosures are being handled.  Apparently at one bank, Ally Bank, one of the foreclosure administrators was processing an average of 8,000 foreclosure packages each month, or 45 foreclosure packages per hour for each 8 hour day, a virtual impossibility.

In private lawsuits (and class action suits) one of the challenges is that the banks foreclosing do not hold the original promissory notes, and therefore they cannot by law foreclose.  At least that’s the argument.  It appears that Banks may have been playing fast and loose with the foreclosure paperwork and the foreclosure process.

Foreclosure Process Creates Market Chaos

What does this mean for buyers of foreclosures?  It means there are unresolved issues, such as:

1.  If you buy a foreclosure, if it is later determined that the foreclosure process was defective, do you own the house, or does the prior owner still legally own the house?

2.  Judges do have the power to reverse or remove a recorded document, such as your statutory warranty deed when you purchased the foreclosure.  Actually, you don’t even get a statutory warranty deed when you buy a foreclosure.  It is a lesser deed that doesn’t warranty your title.

3.  It is theoretically and legally possible that the prior owner would be put back in title, and that you would be evicted from the house.

4.  In the alternative, it is possible that the prior owner would be given some amount of financial compensation for their damages, and that you would be left in title.

5.  And it is possible that your title to the property would be defective, but that you would have a right to sue the foreclosure bank to get a clear title.  The problem is you may not be able to get clear title from them, which may require more litigation or class action lawsuits.

6.  It is very possible that to defend your title to your foreclosure purchase you would have to hire an attorney and begin writing blank checks to your attorney every month.  Litigation of this kind could easily reach $40,000 to $100,000 in attorney’s fees.  Who wants to go there?

Is this likely to happen to all foreclosures?  Absolutely not.  Is it likely to happen to the foreclosure you might buy?  Probably not.  But the uncertainty of the foreclosure process as it is being challenged all over the U.S. makes this a risk that any buyer of a foreclosure must taken into consideration.  Now you know.

If you are in the market to buy a foreclosure, I strongly recommend you hire a Foreclosure Buyer’s Agent.  As a Realtor and a prior real estate attorney who handled many foreclosures myself, I understand the foreclosure process intimately, and I understand how to protect my clients.  As I have written elsewhere, some of the best buys right now in the Sequim and Port Angeles area are listings in the MLS that are not foreclosures.  Many foreclosures are still overpriced, many are trashed, and many are not what buyers are looking for anyway.

I like my clients to be fully informed, and now you know about the defective foreclosure process.

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If you are buying a home in Sequim or Port Angeles involving a short sale, here are three proven steps to making that purchase a huge success.  If you’re not familiar with the term “short sale,” it involves buying a home at a price that is less than the current mortgage balance.  Most people are familiar with the concept of a car  being upside down when the car isn’t worth what is owed on it.  Until the recent real estate recession, we didn’t have homes that were upside down.  Around the country many homes have had to sell as short sales.  Of course, this requires the bank’s agreement to cut their losses and take a payoff on the loan that is less than what is owed.

Short sales are closing every day in cities like Las Vegas and Phoenix, but not in Sequim and Port Angeles.  The procedure and the steps to accomplish a successful short sale here are different than the template for the short sale hot spots around the country.  As a real estate attorney who handled many foreclosures and short sales, and now who represents buyers in short sales as a real estate agent, I’ve articulated three steps to a successful short sale in Sequim or Port Angeles.  If you do complete these three steps, you still have no guarantee, but if you miss one of these steps, you are guaranteed to fail or end up with a nightmare scenario.

3 Steps to Buying a Short Sale Home

1.  Know the process and save yourself from disillusionment.  Know that negotiating a short sale in Sequim or Port Angeles will be a slow and tedious process, and the bank can leave you waiting, literally not responding for months.   The process can drive a normally patient person to say, “Forget it, I’m not going to sit around waiting, not knowing when or if anyone will decide to respond to my offer.”  [Again, this is not the same in Las Vegas where there are currently 700,000 loan modifications in process.]

2.  Find a Professional Short Sale Buyer’s Agent.  Buying a home that must be a short sale is not something you want to do without an experienced professional who has been there, done that many times.  There are many nuances and many traps for the unwary.  I picked up many clients as a real estate attorney who thought they knew all they needed to know, but subsequently found themselves in deep trouble.  When I represent a client as their Short Sale Buyer’s Agent or their Foreclosure Buyer’s Agent, I cost my clients absolutely nothing.  Sounds too good to be true, doesn’t it?  But it is true.  The seller pays all my fees as well as his agent’s fees.  What I give my clients is a lifetime of real estate experience, including many short sale and foreclosure transactions.

3.  Do Your Due Diligence.  You’ve got a lot of due diligence to do when buying a home in a new area, and a short sale or a foreclosure will require some additional due diligence because of unique problems associated with distress sales.  Also in this process, the bank will submit certain documents to you, in addition to the standard real estate forms used in Washington, and these forms will require legal interpretations as you will be asked to sign them.  Some entities representing banks in this process have put together forms that were not drafted by an attorney and give them complete access to all of your personal financial accounts and identity.  That is not only inappropriate, but dangerous, and yet many who don’t know or aren’t getting good advise are signing such documents. [I know this because I have reviewed these documents and advised my clients.]

Your ideal home may be in the MLS and listed with an agent, and it may or may not necessitate a short sale, but if it does, know how to go through the entire process and come out a winner.

I hope this information is helpful.  If you do find a home that is for sale, and it is either a foreclosure, or was, or it must be a short sale, you can hire me as your Short Sale Buyer’s Agent or Foreclosure Buyer’s Agent.  Contact me by email, chuckmarunde@gmail.com, or call me at 360-775-5424.  I would love to represent you.

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