topic Re: The Dribble Out Method in Bay Area

The Dribble Out Method

ChuckMellow — Thu, 18 Jun 2009 17:02:59 GMT

I've been told by several people that banks are slowly releasing foreclosures to avoid flooding the market with homes and driving down prices. If you look at the rate REOs come on the market this is obviously true. I'm also hearing though that because of the amount of foreclosures they can't sustain this strategy because it's becoming too costly to hold them and that they're going to start putting them on the market at a faster pace. Anyone else heard anything like this? Our realtor told us it costs banks $150/day to hold a foreclosure.

Re: The Dribble Out Method

hamstar — Thu, 18 Jun 2009 17:33:06 GMT

REOs are dribbling out, but not because banks want to. They are just understaffed and have so much work to do they can't get everything on the market fast enough.

The Merc said that it seemed the most banks could process in a month was like 40-42,000- nationwide.

An agent that sells REOs said that she gets banks packets within 48 hours for their approval to put a house on the market, and it takes them 2-3 weeks to get back to her. They are just so busy they can't keep up.

And honestly, that makes much more sense to me than holding back, given that REOs are receiving multiple offers all over the Bay Area at this point.

Re: The Dribble Out Method

CityofReo — Thu, 18 Jun 2009 19:48:54 GMT

Honestly I just clicked on this thread because the name was so curiosity-inducing. I'm sure there's a suspect real estate joke there somewhere to be made, but I'll keep it free of my twisted humor around here.

Thanks for sharing your ideas about real estate owned sales, and keep on coming up with such amusing titles!

Cheers,

Brian

Message Edited by ChrisG on 06-18-2009 12:48 PM

Re: The Dribble Out Method & understaffed banks.

begin — Thu, 18 Jun 2009 20:32:05 GMT

hamstar wrote: "REOs are dribbling out, but not because banks want to. They are just understaffed and have so much work to do they can't get everything on the market fast enough."

Hmmmm -- I hear there are a few people looking for work. Maybe the banks should increase staff?

Re: The Dribble Out Method

sgnese — Thu, 18 Jun 2009 23:31:55 GMT

I guess it depends on what area you're looking at. The one i'm interesting in, Santa Teresa, does not have any new REO going on the list since April. I don't know if this is bank holding back or just doesn't have any to list.

Re: The Dribble Out Method

TomP — Fri, 19 Jun 2009 02:51:57 GMT

How can you have so called multiple offers pushing higher prices

when the sale prices are well under askings , and the GAP is growing?

Only the REA like to make you think there are multiple offers !!!

Look at the asking and sales prices differences...its 10% difference...

http://www.redfin.com/city/17675/CA/Santa-Clara-Santa-Clara-County-CA

Re: The Dribble Out Method

bayareanewbie — Fri, 19 Jun 2009 03:07:45 GMT

I've wondered about that gap as well. But, as far as multiple offers goes, I know this is happening as we have been outbid more times that I like to admit (and we often offer over asking price).

Re: The Dribble Out Method

TomP — Fri, 19 Jun 2009 04:07:43 GMT

" I know this is happening as we have been outbid more times that I like to admit (and we often offer over asking price)."

Can you confirm that with names, contact # and amounts ?

Do you want someone to be pulling an "Enron" on you ?

Re: The Dribble Out Method

bayareanewbie — Fri, 19 Jun 2009 04:30:45 GMT

So, what are you implying? They took the house off of the market after we made an offer because they thought they might make more money from us by telling us that we have been outbid and to look elsewhere? Obviously, they are not giving us names/numbers...that would be illegal. The bottom line is that myself and my brother-in-law have both been looking to buy a house for the past 3 months and have lost more than a few to "better offers". Not sure how you are attempting to explain this.

Re: The Dribble Out Method

TomP — Fri, 19 Jun 2009 04:50:21 GMT

"Obviously, they are not giving us names/numbers...that would be illegal."

Far from it! Nothing illegal allowing the marketplace to be fully transparent...

"the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion."

As any good auditor would say... get confirmation. How can you have a meaningful transaction when the transaction is one sided where in your the dark regarding prices?

Re: The Dribble Out Method

TomP — Fri, 19 Jun 2009 04:51:41 GMT

This bubble was built on fraud! not just wall street but also main street by realtors pumping prices higher.

Re: The Dribble Out Method

luckydogz — Fri, 19 Jun 2009 08:27:07 GMT

tomp, how are you suggesting that confirmation and transparency be done? Change the practices that all agents adhere to? Or what?

Re: The Dribble Out Method

SidewalkHomes — Fri, 19 Jun 2009 14:26:47 GMT

TomP writes

How can you have so called multiple offers pushing higher prices

when the sale prices are well under askings , and the GAP is growing?

Only the REA like to make you think there are multiple offers !!!

Spoken like someone on the outside looking in. I work the market every day. Sales prices of regular sales are well under asking, but if you do an analysis of sales prices of foreclosures, you will find a very different set of statistics.

I write offers every week. 90% of the homes are overpriced, so if/when they sell, they will be for lower than the asking prices. But many foreclosures are priced artificially low to drive up competition. That's why 80% of the homes get 0-1 offers, and the top 5-10% of the homes get a lot of offers.

One key thing most are overlooking on this site is time on market. Think about it. If your home has been for sale 1 week, are you likely to accept an offer 10% under asking price? Very unlikely. But if you're home has been for sale 3 months, that same offer looks a whole lot better.

Re: The Dribble Out Method

hamstar — Fri, 19 Jun 2009 19:14:41 GMT

TomP-

Been happening to us to, over and over. Know how I know it's true? The houses have closed escrow. People have keys, there are now cars in the driveway, weeds are getting cleaned up. At least one other offer, then, was real. One house went into contract and fell out, 4th time was the charm, each time we resubmitted, each time they clearly thought they had a better offer.

Certainly though, the all-cash common phenomenon, which is resulting in lower sale prices, could be skewing #s for the last 90 days.

Re: The Dribble Out Method

TomP — Fri, 19 Jun 2009 21:35:28 GMT

Lets have bidders registered and interested parties name and amounts opened up.

Re: The Dribble Out Method

TomP — Fri, 19 Jun 2009 21:52:59 GMT

as a former auditor... i never take some ones word for it. Take a step back and describe to me the internal controls you have in place which prevents fraud from taking place as it relates to MOs.

Guess what you dont have a single control in place which would prevent price manipulation outside the buyer. None at all.

I read all the reasons and statistics over the past 10 years why prices will never fall! Guess what happened. Time on market has been heavy manipulated by pulling listings and relisting it multiple times.

Re: The Dribble Out Method

bayareanewbie — Fri, 19 Jun 2009 22:37:16 GMT

TomP wrote:
How can you have so called multiple offers pushing higher prices
when the sale prices are well under askings , and the GAP is growing?
Only the REA like to make you think there are multiple offers !!!

Look at the asking and sales prices differences...its 10% difference...
http://www.redfin.com/city/17675/CA/Santa-Clara-Santa-Clara-County-CA

I really have no idea, but one possible explanation for this discrepancy could be due to the sales of homes at auction during the foreclosure process....

Re: The Dribble Out Method

TomP — Fri, 19 Jun 2009 22:46:50 GMT

Thats right bayareanewbie -- 'no idea', but as a buyer who is responsible for your own due diligence.

Given your the one who is bringing money to the table, and responsible for the mortgage obligation, you deserve more transparency.

Re: The Dribble Out Method

luckydogz — Sat, 20 Jun 2009 04:54:34 GMT

tomp wrote "Lets have bidders registered and interested parties name and amounts opened up. "

interesting revolutionary concept - is there anything similar sold that way - that is, similar but not identical products sold for hundreds of thousands of dollars where "bidders registered and interested parties name and amounts opened up."

Message Edited by luckydogz on 06-19-2009 09:54 PM

Re: The Dribble Out Method

TomP — Sat, 20 Jun 2009 04:43:02 GMT

Maybe not so revolutionary concept after all, but very good method for transparency.

The secret's out on phantom bids

Registry, open bidding needed to stamp out phony offer scams, some realtors say

http://www.thestar.com/printArticle/256968