Using AZ Bidder to Buy Homes at Trustee’s Sales: Videos 1-4

“The most valuable commodity I know of is information.”

–       Gordon Gekko in Wall Street, 1987

I was 15 years old when the film Wall Street was released.  I had no interest in business back then.  I was too busy popping pimples and chasing girls – on my bike.  By the time I got around to caring about business, about 15 years later, the movie was off my radar.  That is, until Wall Street:  Money Never Sleeps came out in 2010.  I finally watched Wall Street and I wasn’t disappointed.

Last December, I was introduced to AZ Bidder by Tom Ruff of the Information Market.  This powerful web-based program allows me to bid on homes sold at trustee’s sales (auction) here in Maricopa County, Arizona, online.  With this service I can search for homes in foreclosure by city, zip code or file number.  It allows me to build in my own assumptions for holding costs and repairs.  I can order and view title and drive reports.  The market analysis information comes directly from the Arizona Regional Multiple Listing Service.  Once I finish my due diligence I can place my bid and watch the auction unfold live on my computer screen.

That’s a lot of stuff and I’m sure I left a few things out.  Whenever I log into the system I think of Gordon Gekko.  With all of this information at my fingertips I can make better buying decisions.  It makes we want to go around quoting him.  This line is one of my favorites –  “I don’t throw darts at a board. I bet on sure things.  Read Sun-tzu, The Art of War. Every battle is won before it is ever fought.”

I posted 4 videos here today.  On Monday I will post the other three.  Here’s the order:

1. Property search
2. Identification and research
3. Market analysis
4. Marking for bid (title and drive report)
5. Placing the bid
6. Watching the bidcast
7. Final Results

*For the best resolution I recommend you view these videos in full screen mode with the 720p HD option selected at the bottom right corner of the video box.

Video 1 – Property Search

Video 2 – Identification and Research

Video 3 – Market Analysis

Video 4 – Marking for Bid

How About a Homebuyer Mulligan?

The story is part urban legend, part sports folklore.  David Mulligan was driving to the golf course one crisp, early morning when he nearly crashed his car after crossing a rough bridge.  His nerves were understandably frayed by the time he reached the clubhouse.  As he gripped his driver at the first tee box the events from earlier that morning flashed through his mind and he shanked his golf shot into the woods. 

David’s friends, a very forgiving bunch, took pity and gave him another shot without a penalty.  The rest is sports history.  The “do-over” shot, more popularly known now as the ‘Mulligan’, became a part of the golf glossary forever.  As a matter of fact, the term ‘Mulligan’ has transcended golf.  You can now hear it used in other sports and life situations whenever someone needs a do-over.

The median home price in Phoenix dropped 2.26% from June to July and sales are down 26% from this time last year, according to Tom Ruff of the Information Market. Much has been written lately by economists, analysts, pundits, politicians, columnists and bloggers about what can be done to turn this housing market around.  It appears as though the homebuyer tax credit has done more harm than good.  It artificially boosted prices and now that it is gone sales are plummeting faster than my golf handicap after a few cold ones at the turn (for you non-golfers that means my game falls apart after I have a few beers between the 9^th and 10^th holes.)

Last week, the Treasury department held a Future of Housing Finance conference to discuss this issue.  Bill Gross, who runs PIMCO, the world’s largest bond fund, was there and advocated that all government backed loans over 5.75% (Fannie Mae, Freddie Mac, FHA) be readjusted to today’s interest rate.  This plan, according to Gross, would provide much needed stimulus and boost home values by 5-10%.  Sounds like a good idea right?  Unless, of course, you are a bond investor.  They argue that’s robbing Peter to pay Paul.

No one invited me to this conference.  I recently moved so it may be because they didn’t have my new address.  But, I’m not that hard to find so I can only conclude that they could care less about what I think.  Nevertheless, I’m going to submit my opinion here and hope this gets passed on to the powers that be.

I know a doctor, attorney, physical therapist, social worker, church pastor and engineer who are all upside down on their mortgages and are going through short sales.  These are responsible, educated, hard-working people that, besides the mortgage on their primary residences, are current with all other payments.  They have good incomes, cash reserves and assets.  Their only mistake was buying a home at the absolute worst time in American history.  These people deserve a do-over, a homebuyer Mulligan.

Banks should loosen up their lending criteria and lend money to people who:

1. Have just one blemish on their credit report (i.e. a short sale or foreclosure).
2. Have an income greater than 3 times their mortgage payment.
3. Have at least 20% to put down.

The banks wouldn’t even have to offer rock bottom interest rates.  I’m fairly certain they could get at least 3-4% above prime for a loan product like this.  It would allow hundreds of thousands of Americans to become homeowners again and increase demand at every price point.  There would be dancing in the streets and I would finally get invited to the big Treasury department meetings.