Coming next week in Sherman Oaks: huge, super-deluxe townhome (and better pics, too)

I'll soon be listing this gorgeous, huge townhome at 4604 Norwich Ave. in Sherman Oaks.  It has four bedrooms, 4 baths, a bonus room, 2-car garage, open floor plan, roof-top deck, high-end finishes throughout, and 2400+ square feet.  It was built in 2008 and there are only 4 units in the complex.  The home owners' association dues are a low, low $144/month.  The complex is on a quiet, green residential street but it's close to Ventura Boulevard and all its attractions.  It will list at $550,000.  This is a terrific option for those looking for lots of "done" square footage at a lower price. 

This is an REO, which means it was foreclosed on and is now owned by the original lender.  For those of you that don't know, these types of sales usually go much more smoothly -- and quickly -- than short sales.  I will have much better pics later this week.

Foreclosures and REOs - there is a differnce.

I'm often asked by potential property buyers if I will help them find a foreclosure. My buyer clients often think that these properties are offered for prices below market, and perhaps need just a little fixing to make them habitable. Umm, that's not quite correct.

First, there are two delicious flavors of foreclosure: plain foreclosure and REO. The differences bear repeating. A foreclosure property has not had its mortgage or other obligations paid in several months, and the lending institution is in the process of taking the home back from the owner. There are several stages to this; and the foreclosure can be "cured" at any of these stages. If the default is not cured by a certain date, the house usually goes to a trustee sale, which is often held on county courthouse steps. Very important to know: these homes are not on the multiple listing service, but you can find them on paid sites like ForeclosureRadar.com. Anybody can go and bid on a house at a trustee sale, but potential buyers will have to exceed the amounts owed to the lender on the property.

An REO stands for "real estate owned" -- by the lending institution that held the defaulted mortgage. This designation comes at the trustee sale when nobody has outbid the bank (frequently, nobody does). The lending institution now owns the property. The lending institution will eventually place the now-vacant home with a Realtor, and it will be available on the multiple listing service. And here's more bad news: once it goes on the multiple listing service, it usually goes out at market prices as well. There aren't usually deep discounts.

Yes, there are other details, and sometimes homes go for auction. (See auction.com post below.) But these are the main differences.

REOs are not that bad! Really!

I just closed an REO, which is a property that has gone through the foreclosure process and is now owned by the bank. It was much easier than I expected. The house (pictured) at 1101 N. Catalina in Burbank, was owed by Wells Fargo. It listed for $500,000 and my buyers, knowing that there were other offers, came in at $501,000 -- just as the bank accepted another offer. During that escrow, we kept checking back with the listing agent re the status. Sure enough, it fell out of escrow at the last minute and the bank accepted our offer. Escrow was a little bit slow to open. The seller/bank agreed to credit my buyers $2,000 towards repairs and had already done all pest work. Great!-- we were not expecting that. There was a last-minute glitch regarding the home warranty company, but we still closed escrow right at 30 days. Of course, it helped to have very heads-up, proactive buyers and a great lender (thanks, Dana).