Once a property is fully foreclosed by a bank or lender and listed for sale, it is commonly referred to as a REO (Real Estate Owned) listing. Most bank owned properties are listed with local real estate agents. Good buys are available. They require research, preparation, patience & persistence. Buying a bank owned home isn’t easy and it’s not without risk. The list below should be useful if you decide to take advantage of today’s unique REO buying opportunities:

1. Choose a real estate agent who is familiar with REO practices to help you navigate the process, confirm property values, and negotiate terms. (My contact info is at the top of this page.)

2. Get pre-approved by a qualified lender. The banks have already been burned — why would they consider your offer without written lender approval or proof of funds?

3. It’s “buyer beware,” folks. Most bank owned homes are exempt from typical seller disclosures and are sold “as is.” Don’t expect banks to pay for repairs or upgrades, although it never hurts to ask. Lenders will allow you to get all the inspections you want, at your expense, and your agent can use the results for negotiating terms with the bank. If substantial work needs to be done, have a licensed contractor take a look before you write your offer or have your agent negotiate an inspection contingency.

4. Making an offer: Your agent should find out if there are any existing inspection reports on file, what work (if any) the bank will agree to, and if the bank requires a special purchase agreement form or other special requirements. (Many banks will only respond to offers written on their own forms; CountryWide requires buyers to be pre-approved by CountryWide, even if you’re going to use another lender.)

5. Pricing your offer: Most REO properties are priced to sell and will likely sell within 15% of the list price. I’ve seen better properties command a bidding war, selling for more than asking price. If you lowball your offer, don’t be surprised if the bank doesn’t respond at all.

6. Once you know what you want and can afford, be prepared to write several offers before you get one accepted. Asset management companies, the third party hired by lenders to liquidate foreclosed properties, are typically overwhelmed and routinely take longer than expected to respond. Unlike traditional sellers, lenders do not review files or consider offers on weekends and holidays.

7. Financing: For qualified buyer and investors, exploring financing options with the REO lender may produce a better-than-market interest rate, reduced down payment amount, or other financially favorable outcome. (You’ll still need a prequalification letter from any lender just to get to the bargaining table.)

8. REO sales are void of emotion for the seller. They make their own rules. Decisions don’t have to makes sense to anyone but the bank. If you (and your agent) understand this basic principle, you might just be a good candidate to buy a bank owned home.

Thanks to Michelle Brown of Financial Title for the original list.

While venture capitalists are pouring money into Silicon Valley green-tech companies, cities in other states are making bold moves to build green communities.

On May 4, 2007, a class EF5 tornado, nearly two miles wide, destroyed 95% of Greensburg, KS. Left with a blank slate and true the the nature of their self-sufficient image, the community made a committment to rebuild as a model 21st century “green” rural American town.

According to ABCNews.go.com, “Since just a few days after the tornado, the small farming town has made ambitious plans for rebuilding green, from a wind farm at the electric plant to green homes and businesses.” The plan calls for mixing urban amenities with a rural setting.

All city-owned buildings will be built to meet LEED Platinum standards and homeowners are being given big incentives to rebuild green. I hope that they will be utilizing tornado-resistent technologies, as well.

The non-profit group created to support Greensburg’s Green intitiative has launched a One Million $5 Donations Campaign to show that a million small things make for big change. You, too, can donate to help them out.

Besides you, the government, and insurance companies, others have come in to help.

In a prime example of integrative learning, architecture students at Kansas State University have designed eco-friendly and weather resistant cubes that help make the city sustainable.  These 10′x10′x10′ modular structures have different educational and functional aspects, like public showers and toilets using recycled rain water and recycling bins with an interactive learning system. KU students are also designing a fine arts center.

Maxon, a District Energy and Green Power developer, is developing the “Energy Master Plan” for the City Of Greensburg in close cooperation with the National Renewable Energy Laboratory and the EPA.

Thanks to Maxon Energy for the photo used above. Before and after satellite photos are also enlightening.

Compared to Greensburg’s committments, Santa Clara County’s change-out-your-lightbulbs campaign seems a bit feeble (although each person should be doing this, and other small steps, too!).

All this stuff we hear about living green. There are so many things that we can do that are easy. Here’s a behind-the-scenes tube about our stuff.

Why watch it? Well, from its extraction through sale, use and disposal, all the stuff in our lives affects communities at home and abroad, yet most of this is hidden from view. The Story of Stuff is a 20-minute, fast-paced, fact-filled look at the underside of our production and consumption patterns. The Story of Stuff exposes the connections between a huge number of environmental and social issues, and calls us together to create a more sustainable and just world.

It’ll teach you something, it’ll make you laugh, and it just may change the way you look at all the stuff in your life forever. (description from dotSUB.com)

So, you want to refinish the floors or that dresser (with potential!) you found at a garage sale. Forget the noxious odors and health risks associated with paint strippers.

aMAIZEing^TM Biobased Solvent & Stripper is a 100% bio-based solvent and stripper, derived from corn and soybeans. It and similar products made by SoyClean and  Molecular Tech Coatings Inc.’s EFS-2500 removes adhesives, paint from concrete, masonry, wood, metal and other surfaces.

aMAIZEing can also be used to remove graffiti from concrete if your place gets tagged on a regular basis. Or it could be time to move.

Fidelity National Title is the most recent title insurance company to offer customers an eco-friendly alternative to traditional paper-based closings. According to a recent announcement by account manager Desiree Baker, they are providing the following earth-friendly solutions:

1. An online application utilizing e-signatures (original notarized documents will always need to be hard copies).
2. Online document storage to eliminate the need for paper. New software helps transaction coordinators streamline and automate their workflow.
3. Paper document conversion into PDF files that can be delivered to any email address.
4. Online view of property disclosure details that can be accessed by internal and external users.
5. Single property listing websites to eliminate the waste associated with property fliers. The vast majority of buyers now search online.

A paperless system seems like an easy solution to reducing the reams of paper used in a typical real estate transaction, but it’s been a long time coming. Congratulations to Fidelity for making it possible.

Keeping up with the Joneses effects investment decisions, according to a couple of Stanford U. profs. Fear of missing out seems to be a driving factor. We don’t want to be poor when everyone around us is rich.

Making the wrong decision is not as bad as not making the right one. After all, when the bubble bursts, everyone loses together.

This certainly explains all the new Rich Dad fans vying to be landlords during the real estate boom. Now that foreclosures and tighter credit have driven prices so low, where are they? Waiting for the market to turn again, of course.

Meanwhile, the savvy investors are quietly picking up bargains every day.

Home staging is the idea of decorating a home to make it more attractive to buyers. 

Not moving? Then use it to make your home more livable, attractive, and a healthier “nest” for you and your family!

The act of creating a powerful first impression can be done for a minimal investment. If you’re selling, you’ll can increase the perceived value of your home dramatically (which may result in a shorter selling time and a higher sales price). If you’re staying, you’ll create a more relaxing and comfortable atmosphere.

There are a few distinct differences between staging your home for life versus staging your home for a sale. Read on for a few tips, no matter what your situation is.

First impressions:
Whether you’re staging for your own life or staging for a sale, you only have one chance to make a first impression on visitors. Potential buyers may only be in your home for three or four minutes, so you want those first moments to be positive. Don’t forget simple yet significant improvements to your home’s exterior, like:

• Mow the lawn and trim dead branches (especially near windows and doors)
• Place some pots with colorful flowers on the porch
• Give the front door a fresh coat of paint.

Your home will now give visitors a warm welcome, whether they’re over for a personal visit or as a potential buyer.

Your stuff:
Staging for life – Staging your home is about decorating with your tastes, reflecting your individual style.
Staging for sale – When putting your house on the market, it’s important to consider the buyer. What does the average buyer need to see in order to fall in love with your home?

• Try to avoid leaving personal items in plain sight.
• Keep it clean and simple.
• Focus on highlighting the best features your home has to offer.

Less is more:
Staging for life – Ask your real estate agent or a professional stager the single greatest improvement you can do to make your home more livable. They’ll tell you to get rid of the clutter. Having a bit of organization and eliminating unnecessary “stuff” in your home, including piles of junk mail and old magazines, will help to create a more open environment.
Staging for sale – When putting your home on the market, you want it to look lived in, but you don’t want home buyers focusing on you collection of ceramic cows instead of noticing the custom cabinets you had installed. Most professionals also advise putting personal pictures away. This helps home buyers imagine your home as their home. Remember to clean out closets so they appear more spacious. Don’t forget to organize or clear out medicine cabinets, as potential buyers are likely to open those, too.

A room with a use:
Staging for life – You may have specific uses for various rooms in your home (using a spare bedroom as a craft room or office, or setting up the garage as a home gym). This is exactly how it should be. Don’t feel bound by the limitations of a room’s label.
Staging for sale – On the other hand, it’s pivotal to let home buyers see rooms as they were originally intended. Turn that playroom back into it’s original state. Perform an inexpensive and quick makeover for these rooms by hanging sheer curtains to let in daylight and replacing aging light fixtures and switches.

Freshen up:
Staging for life – We all have our routine cleaning schedules, but consider doing little extras for yourself. Touch up the paint in your lived-in rooms. Treat yourself to a few houseplants to liven up your living areas. A little can go a long way.
Staging for sale – Channel you inner cleaner and decorator. Steam-clean the carpets. Touch up the paint. Add emotional warmth with throw pillows, dramatic plants, and unscented candles.  For that “Architectural Digest” look, clear off the counters  in the kitchen and bathroom. An inexpensive way to add color is with a vase of vibrant flowers, neatly folded towels, or a bowl of fruit.

It’s a topic discussed in most major lifestyle magazines and on your favorite home decorating shows — feng shui. I was first introduced to this ancient Chinese philosophy in the early 1980s as it applied to architecture, landscape features, and martial arts.

Meaning “wind” (feng) and “water” (shui), its principles can be applied to almost any decorating style to create a harmonious home environment. In addition, we’ve used feng shui techniques to attract potential buyers to help sell houses that have been stagnant in the market.

Here are our top 10 tips on how to harness the energy and vitality of feng shui within your own home.

1. Reflecting disharmony. Remove or cover large mirrors in the bedroom if you don’t sleep well.
2. Room with a view. Place your bed to give you the widest view of the room. Your bed should not be in direct line with the door. Paint the bedroom walls in a color scheme that is both pleasant and inviting.
3. Calming sounds. Hang wind chimes outside your front door to create a soothing environment for occupants and guests.
4. Writing on the wall. Try to avoid having completely bare walls. Group together non-personal pictures or hang up interesting art pieces in a diagonal or staggered pattern.
5. Go with the flow. Place a blue or black doormat at your front door to encourage good things to flow in like water.
6. The color of love.Include the romance colors - white, pink and red - in your room. Don’t overdose with a red wall because too much red can trigger anger.
7. Plants for energy. Rooms filled with plants will give its inhabitants a feeling of tranquility and lead to improved well-being. Healthy plants generate positive energy. Avoid dried flowers because they have no energy left.
8. Look overhead. Move beds, couches, and desks from any overhead beams to keep energy flowing.
9. Less is more. When arranging furniture, less is more. Too much clutter can restrict the potential of a great room.
10. Create positive impressions. Keep counters clean, closets organized, and clutter concealed. This projects an organized and stress-free environment for you and your guests.

Even if you don’t subscribe to the feng shui philosophy, the basic concept is clear and common-sense. If you home is clean, comfortable, and well-organized, you will find it a more relaxing place to live.

Thanks to Buffini & Company for this top ten list.

Breaking News from the New York Times

“A word to the wise: The great Los Angeles housing boom is over. The real estate price explosion in southern California, which sparked a national boom still continuing elsewhere, has stopped. The bubble that everyone said could never burst has burst. All over Los Angeles and Orange County, home buyers can buy a property for less than it would have cost a year ago, although there are exceptions. Buyers who can pay cash can almost steal houses and real estate. The days when ordinary citizens got rich from buying houses are gone, at least for the time being and at least in southern California. But what a bubble it was. ”

Did I mention that this article was originally published August 17, 1981. That’s more than a quarter century ago! Bet you wish you bought then!

More snippits from the article:

“The boom went on for such a long time because the economics were right. . . .Figure it out: mortgages were less than 10 percent for almost all of that decade, under 7 percent if you count the tax features, and houses were increasing in value all over the West Side of Los Angeles by a good 20 percent a year on a compounded basis. The banks, savings and loan institutions and and the economy generally were paying families to live in the better neighborhoods of Los Angeles. . . .This cheap credit fueled the takeoff of the boom. As prices rose to stratospheric levels, the price history itself fed the boom. . . .Even when mortgage interest rates shot up to 13 and 14 percent, the houses were still going up 20 percent a year, so who cared?”

Then the crisis came. The Fed took on inflation and interest rates hit 18%.

“Buyers became fewer and more choosy. Houses that once sold in a week stood unsold for a year. As demand fell, prices stopped rising, then began to fall. . . .Suddenly buyers decide to stay with their old houses and their rentals. Demand declines and prices slide a little more. Families who thought they were rich from their houses find that they simply cannot sell except at an immense discount. And the air goes out of the bubble. . . .”

“Of course, Los Angeles is still a desirable place to live, the economy is still relatively strong and no one seriously contemplates a major crash. And, of course, all bubbles, in every commodity, always end some time.”

So, it’s a buyers market again. What are you going to do about it?

Benjamin J. Stein’s entire article, “Housing Boom Goes Bust in Los Angeles,” was recently republished by the New York Times. It’s good to have perspective.

If a creek is eroding your property, what you do to stabilize the banks can have significant unintended consequenses to your property and others downstream.

Some typical guidelines for bank stabilization approaches include:

• Do not reduce the width of the creek, as this will almost certainly cause erosion both in the bed and downstream.
• Do not reduce the length of the creek (by straightening a bend for example). This action will steepen the bed profile, increasing erosion locally, and on the next bend downstream.
• Where possible, combine grading activities to flatten bank angle and use a mixture of biotechnical methods such as brush mats and willow planting.
• Where rock is required, place rock (mechanically or by hand) rather than by dumping. Dumped rock generally forms an unsustainably steep angle, which eventually collapses and rolls rock into the creek.
• Limit the upper vertical extent of placed rock for structural and erosion protection requirements on the bank slope to maximize plantable areas. Key rock into the bed several feet to prevent undercutting.
• Utilize rock sizes based on calculations of flow force and resistance.
• Integrate native trees such as willow and alder with the engineered rock bank protection.
• Integrate native trees such as willow and alder with the engineered rock bank protection. Integrated planting has several benefits:
  • Roots anchor the soil beneath the rock, providing a living support system that increases the strength of the bank protection over time
  • Vegetation slows water velocities, reducing erosion both at the bank and downstream, and
  • Trees provide shaded cover for the creek, improving habitat conditions.

These “conceptual restoration approaches” come directly from Portola Valley’s Citizens’ Guide to Creek-Side Property Protection. The guide was created as a tool for the Town and its residents to use in guiding design, permitting, and construction of bank stabilization and revegetation efforts along Corte Madera Creek.

I know that Palo Alto and Menlo Park are looking to this an other guides for stabilizing the banks of San Francisquito Creek. It will not surprise me if other local like-minded towns (Woodside, Los Altos Hills, and Los Gatos, at least) move in this direction, too, if they can get it through the creeky legislative system. (Sorry, I had to work that in somewhere.)