Real estate integrity on the internet

Real Estate integrityThe internet is brimming with information.  And although a lot of information is based in fact, there’s plenty that is not.  People often fall prey to internet half-truths because information is often presented convincingly with conviction by websites claiming to be the authority.  The internet can be such a quagmire that even some trusted and reliable media outlets have been fooled. How about real estate integrity?

Home buyers and sellers are increasingly depending on the internet for information to assist them in buying and selling real estate.  Many real estate websites that are visited not only contain current homes listed for sale as syndicated by the local MLS; they may also post homes for sale by other sources that include homes for sale by owner, fake listings posted by desperate real estate agents, and advertisements from other websites.  Unless you know what you’re looking for, you might never know the posting source or how long it has been posted on the site. Real estate integrity may be lacking.

The MLS syndication is usually updated to ensure accuracy, even if it’s not always timely.  However, it’s the list of FSBO’s, sham listings, and advertisements that can be out of date and/or used to lure consumers to visit other sites.  Some home buyers/sellers can be lured to occasionally spend money for bargain homes for sale and home sales information.

Sometimes, real estate integrity is intentionally substituted for salesmanship. Some real estate websites post advertisements as “teasers.”  The teaser may show a home for sale at a great price, but could lead to another website that may charge for the full information about foreclosures or bargain homes.  Once on these sites, some consumers misunderstand that all the homes listed are for sale.  The reality is that although these sites provide a service of collecting and posting public information about homes that have foreclosure notices and other related information (and sometimes even list MLS listings for sale), not all the homes are for sale.  In fact some of the homes listed as distressed properties may never be offered for sale as a foreclosure because the home owners resolve their issues without losing their home.

The internet continues to be a source of real estate related scams.  Internet real estate scams continue to prey on susceptible home buyers and sellers, as new and sophisticated cons are devised.  Scammers often post fake names and photos to present themselves as being local, when they are not.

Yes, many property websites have taken steps to maintain real estate integrity by monitoring postings, and allowing user feedback to flag problem listings; and some of the leading real estate websites strive to continually improve on the consumer experience.  However, if you want up to date and accurate home listing and sales information, talk to a real estate agent.  Your agent has access to the local MLS and can not only provide you with timely home listings and contract status; they can also provide you with an up to date home sales analysis.

Just because you found it on the internet, does not necessarily mean it’s accurate.  Practice due diligence and check out the source.  A lot of real estate related information posted on the internet can be verified through public records.  Public information is often readily available on the ‘net, and can be found on public websites maintained by State and local jurisdictions.  For more information on protecting yourself on the internet, visit the “scams and safety” link on the FBI website (FBI.gov).

Original located at https://dankrell.com/blog/2013/02/28/real-estate-and-the-internet-its-gotta-be-true/

By Dan Krell
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This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.

Don’t buy into a false economy

by Dan Krell
DanKrell.com
© 2012
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Auction Stories about housing and real estate often reported in local media are entertaining and sometimes informative. However, some stories can create an erroneous impression about what’s happening in the marketplace. If you are not careful, you may be lead to buy into a false economy; using a Realtor® in today’s market is vital to get real time neighborhood information to make the best decisions.

A recent story highlighted a DC foreclosure that reportedly received over one hundred offers, and the accepted offer was more than double the list price. The story appeared to use this home sale as an example of a hot DC market. And make no mistake – that neighborhood is a hot market for various reasons (including the limited number of active homes for sale); but there’s missing information that could distort your perspective.

First, understand that the story referred to the sale of a HUD owned property, which was most likely a FHA foreclosure. The fact that there were reportedly 168 offers on the property is not unusual for a HUD owned property located in a neighborhood with very active buyers; although some HUD properties don’t get much attention, it is not unusual for many such homes to attract a lot of attention, as well as many offers.

Most offers on HUD homes are usually at list price or below, not only because savvy buyers are seeking a foreclosure bargain; but because of financing limitations. HUD appraises these properties so as to know the market value, and usually lists the home at that price. HUD foreclosures that are eligible for FHA financing use that appraisal, and are therefore limited to that price.

The MLS listing for this home indicated that it was listed “Insured with Escrow,” which means that the home was eligible for FHA financing. And looking at recent neighborhood comps, it looks as if the home was priced competitively. Additionally, the repair escrow indicates that the home requires repairs to meet FHA guidelines.

AuctionAlthough there are some buyers who pay over list price for an “Insured” HUD foreclosure, they know they need to pay cash or find alternate financing; so unless the buyer of this home has cash, the buyer could encounter issues obtaining alternate financing. Furthermore, although the story reported that the home sold, the MLS listing indicates that the home is under contract with contingencies (home inspection). So, the home is far from settled, and it remains to be seen if this contract falls through (or remains owner-occupied as required for this sale).

Although the story about this home sale was interesting, it is not typical for the housing market. The story does not indicate that the reported 14% DC median home sale price increase compares November 2012 sales to November 2011. There is also no mention that “luxury” home sales could have impacted November’s home sale price figures; GCAAR (gcaar.com) reported that DC single family home sales priced at $1.5M and above increased about 111%! Also, according Realestate Business Intelligence (rbintel.com), the November 2012 average DC sale price is about 97% of list; the average sale price is not over list.

Don’t get me wrong, this was a good story. But the story may be about buying into a false economy and buyer’s remorse; the real story may ultimately be how you should consult with your Realtor® before making a purchase or sale.

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This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of December 24, 2012. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.

Online Foreclosure Searches

foreclosure for sale
by Dan Krell (c) 2009.
www.DanKrell.com

It’s no secret that foreclosure rates continue to climb. It is unfortunate that many home owners have lost their homes, but for some it is an opportunity to buy a home at a potential bargain price.

In past foreclosure markets the secret to finding a great deal was to communicate directly with the bank. If you knew where to look or whom to call, you could get each bank’s list of foreclosures and present your offer directly to the bank’s foreclosure department. In some cases, you could negotiate to buy a home as soon as the bank took title.

In today’s market, the game has changed significantly such that banks no longer directly deal with home buyers to sell their bank owned homes. These days, for a variety of reasons, banks hire real estate agents to list their foreclosures on the MLS. Even HUD lists their FHA foreclosures with real estate agents. You can still find each lender’s list of bank owned homes on their websites, but instead of providing the contact information of a bank representative the bank will refer you to the listing agent.

In an attempt to remain anonymous, many home buyers turn to the internet for information to minimize intrusions from seemingly aggressive real estate agents. The internet is chock full of websites advertising foreclosure listings, information and training; some services are free, while others charge a subscription fee. Two popular websites offering foreclosure listings are Realtytrac.com and Foreclosurepoint.com.

Along with the flood of foreclosures comes the increase of consumer complaints about foreclosure related businesses- including internet foreclosure web sites. Some companies may deceive the public to make money or to collect personal information. Some foreclosure sites use false advertising to lure home buyers to subscribe to their service; some attempt to attract and “hook” home buyers seeking foreclosure information to sell other real estate and/or ancillary services. Sometimes companies attempt to compile personal information to be sold to third parties.

On May 1st, one national company (operating multiple websites- including Foreclosuretown.com) was issued a “cease and desist” order by the North Dakota Attorney General for allegedly misleading the public (www.ag.state.nd.us). Wayne Stenehjem, Attorney General of North Dakota, followed up on many consumer complaints including the misrepresentation of foreclosures. The company over represented the number of foreclosures to lure consumers to pay a monthly fee to receive foreclosure lists. One consumer complained that his home was listed as a foreclosure even though he never missed a mortgage payment. Additionally, photos used to depict the listings were often not the actual homes; the photos may have misrepresented the actual size of the home by associating a much larger home than the actual listing.

If you are serious about buying a foreclosure or just interested wanting to seek information, why not work with a licensed Realtor? Local Realtors not only have access to the local MLS (where bank owned homes are listed for sale), but also have access to tools to identify pre-foreclosures as well as foreclosure auctions.

However, many accept the fact that home buyers wanting to remain anonymous will continue to turn to the internet. If you plan to use any internet foreclosure listing service, do your homework to make sure the company is legitimate and delivers what is advertised.

This column is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of May 18, 2009. Copyright (c) 2009 Dan Krell.