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)

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.

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.)

When the weather gets nasty, its nice to know you can watch it through the windows from the comfortable confines of your home. But are you taking that heat for granted? Freezing rain, high winds and sleet storms can knock out power for hours or even days. Long periods of extreme cold can overtax heating systems, causing them to fail.

This post is a very long heat-loss prevention guide, so be forewarned. Headers are “Determine the Source of the Problem”; “Heat Outages”; “Troubleshooting Heating Problems”; “Emergency Generators”; “Fireplaces”; “Staying Warm in an Unheated Home”; and “Safeguard Against Frozen Pipes.”

Extended periods of heating loss can result in harsh living conditions, unwelcome moisture throughout the house and damage to floors, walls and plumbing. What will you do when the heat goes out?

Determine the Source of the Problem
When your heat cuts out, the first thing you’ll need to determine is the nature of the problem. In general, a home heating emergency will be caused by one of three overall issues: failure of your home’s heating system, local (limited) power failure within your own home or wider-spread regional power outages. Knowing which of the three you’re up against is the key to moving forward.

Power Outages
Most homes rely on electrical power in some capacity to provide heat. Even homes that employ oil or natural gas utilize electrical ignition systems, circulation fans and pumps, and so on. While you will probably know of a power outage as soon as or shortly after it happens, the outage may be limited to your home. Check with several of your neighbors: if their power is still on, you’re likely facing limited power failure within your home.

Check your circuit breaker for flipped breakers and your fuse box for blown fuses. It’s usually a good idea to have a supply of spare fuses on hand at all times. If the issue is not a breaker or fuse, carefully check the service wires leading to the house (if above-ground). Stay clear of any damaged or downed lines and notify your electric company. If power is out for your neighbors as well, a regional power outage is likely to blame. Always report the outage to your power company rather than assume that they’re aware of the issue in your area.

• Turn off all appliances and electronic equipments to reduce load on the system (power can be restored more easily) and to prevent potential damage from surges associated with power restoration.
• Open your freezer and fridge only if absolutely necessary. A full freezer should keep foods frozen for at least 24 hours if the door remains closed.
• Do not use gas, charcoal or kerosene stoves (or barbeques) indoors for heat, as they emit deadly carbon monoxide fumes.
• Never leave lit candles unattended. All candles should be used with proper candleholders.

Troubleshooting Heating Systems
A heavy winter workload can cause failure in your home’s heating system, particularly if it is older or has not received regular maintenance. A trained technician may be needed to resolve many issues with heating and cooling systems, but in the winter these specialists are in high demand. Before you call (and possibly, wait for) a technician, there are a few basic troubleshooting steps you can take to try to get your heating system back online. As always, you should consult your owner’s manuals for further details and leave advanced repairs to the professionals.

1. Gas Furnace

• Double-check the circuit breaker or fuses for the furnace system, resetting the breaker if it has been switched off.
• Power down the furnace unit (the power switch is typically located next to or inside the furnace cabinet). Turn the power back to ON and wait several minutes for the furnace to engage.
• The motor for the blower may need to be reset due to an overload. Look for a “reset” button close to the blower motor. Press “Reset”. If there is no response, wait approximately 30 minutes to allow the motor to cool prior to trying the button again.

Look to see if the pilot light is on. If it is not, try the following:

• Open the panel and turn the control knob to pilot.
• With a flashlight, locate the pilot fixture and light it with a match.
• Set the control to “on”.
• Set the thermostat to high to see if they system is operational. It may be necessary to repeat this process several times. Turn the control off and start over.

2. Forced Air Heating System

• Double-check the breaker for the heating system, resetting the breaker if it has been switched off.
• Turn off power to the unit.
• Check all ventilation areas to make sure they are not covered by furniture or blocked in any other way.
• Check for noticeable air leaks in ducts around the unit. Seal any leaks with several wraps of duct tape.
• Look for the door or panel that covers the blower. This may be marked “filter”. Remove the door/panel.
• Check the air filters and clean the grill. The filter should be marked with a size (if disposable) or cleaning instructions (if permanent). Most newer metal filters can be rinsed with warm water to clean, but check the manufacturer’s recommendation or owner’s manual to be sure.
• If replacing a disposable filter, make sure to slide it in facing the proper direction.
• While the furnace is still open, vacuum out the area around the blower.

3. Steam Heating System

• Turn off power to the unit.
• Check the water level in the boiler. If the level is low, slowly add water.
• If the water level appears low shortly after re-filling, call a technician to check for potential leaks.

Emergency Generators
Home generators can be useful in the event of a power outage, but they do present safety hazards if operated incorrectly.

• Never plug a home generator into an existing electrical circuit.
• Check the power requirements for your furnace and core appliances before considering the use of an emergency generator.
• All lights and appliances should be connected directly to the generator.
• Generators should be operated outdoors well away from all windows, doors and air vents to prevent harmful gases from entering the home.
• Always follow all manufacturers’ instructions for installation and use.

Fireplaces
If you have a wood/pellet-burning fireplace or stove, keep a supply of fuel on hand sufficient enough to heat your home for at least two days. Make sure the flue is fully open prior to lighting any fire. When not in use, make sure the flue is closed tightly to shut out cold outside air. If you have not had the chimney cleaned within the past year, using the fireplace is not recommended. Creosote buildup in chimneys can develop into destructive chimney fires if not controlled by annual cleanings.

Staying Warm in an Unheated Home
As temperatures dip, conserving body heat becomes more and more critical. Here are some strategies for maintaining warmth in the event that you must wait for heat or power to be restored.

• Outfit yourself in heavy clothing, particularly bulky outerwear. If possible wear several layers on your hands and feet. Always wear a warm hat, as an uncovered head results in greater body heat loss.
• Select a “Warm Zone” for the house. Ideally, this would be a room that is away from prevailing winds, has good insulation, does not have many windows and is isolated from other unheated areas. Rooms with a fireplace or other sources of heat are also ideal candidates.
• Use towels or blankets to stop drafts from cooling the selected room.
• Utilize blankets, sleeping bags, large towels, rugs and other materials to create a pocket in the “Warm Zone” that can better trap body warmth. Huddling close together is a good way to pool body heat.
• Close all drapes and window coverings. If cold air can still be felt, consider covering windows with towels or extra blankets.
• Cover openings under doors with towels and/or blankets.

Safeguard Against Frozen Pipes
One of the most significant threats to your home in winter is the possibility of water frozen in the plumbing system. When water freezes it expands up to four percent, enough to cause pipes to crack. This can easily lead to flooding and rampant water damage when heat is restored.

To prevent ice inside your pipes:

• Open cabinet doors under sinks to allow warmer air to flow around pipes.
• Hang a towel on the wall behind the sink.
• Wrap pipes in insulation, or layers of old newspapers wrapped in plastic.
• Turn the faucet at the lowest point in the house on to a slow, constant drip. This is especially important as outside temperatures dip into the 20s and below.
• Close off any rooms that don’t contain pipes to minimize heat loss.
• Turn off the water to outdoor faucets and drain the pipes.
• If outside temperatures are below freezing and you find a faucet with little or no water pressure, you may have an ice clog.

If you suspect an ice block in a particular faucet:

• Turn on the faucet nearest to the pipe with the suspected ice block.
• Follow the pipe to the location where it meets an outside wall.
• Locate the section of pipe exposed to cold air.
• If you still have power, use an electric hair dryer to melt the ice. Move it back and forth roughly one foot above where you suspect the ice clog.
• Contact a professional plumber to inspect pipes and assist with any needed repair.

If the heat loss in your home forces you to temporarily evacuate, take the following precautions to prevent ice within pipes while you are away:

• Turn off the primary water main where it enters the house. Protect the valve, inlet pipe and mete or pump with blankets or insulation material.
• Drain the water from your plumbing system. Start at the top of the house and work your way down, opening all taps and flushing toilets as you move. To drain your hot water tank, attach a hose to the tank drain/outlet valve and run this to the nearest basement floor drain. –
  Note that with gas-fired water tanks, the pilot light should be extinguished prior to draining.
• Un-hook the hoses on your washing machine and drain.
• Add a small amount of anti-freeze to water left in the toilet bowl and to sink and bathtub drains.

Thanks to David Green with RE/MAX of The Wildwoods in Wildwood Crest, NJ, (609) 523-9494 ext.31, for sending this content through the EcoBroker network. I’m certainly not an expert in these areas and learned a lot from the info he provided.

I’ve found poor seals around doors and windows of older homes and new construction alike. If you have cold spots or drafts in your home, check out this chart.

Here are common sources of energy losses and air infiltration points in the home according to Comprehensive InfraRed Thermography Consultants.

Generic winterizing tips may be helpful for you if you’re knowledgeable about the construction of your home. But even a talented do-it-yourselfer can a use professional to identify where your energy dollars are leaking out of the house.