Express Homebuyers

In a sign of the times, I saw my first ad for Express Homebuyers last night. They promise that instead of your house languishing on the markets for months, they'll make you an offer within seven days of you getting in touch with them. Presumably it's not going to be a very generous offer, but "We realize that sometimes life has you in a bind and selling your home as quickly and painlessly as possible is often the best option."

Of course, for a large segment of people simply walking away from a home and a loan and leaving the question of what to do with the property up to the bank is a more attractive option.

Comments

Of course companies like this have been around for a long time. I guess it is possible they are advertising more now, but it may also just be that Matt is paying more attention.

Posted by DTM | April 21, 2008 10:01 AM

"home short sales in lieu of foreclosure" articles are also proliferating throughout the media.

"Jingle Mail" where a home-owner sends in the keys to the bank is another term we'll keep hearing about.

and then, suddenly, there is a lot more rental property available in the suburbs.

Posted by mike c | April 21, 2008 10:09 AM

Actually, Express Homebuyers has been running ads for since at least 2005. I think they actually started running ads in 2004. If I remember correctly, it was formed in 2003. Sorry to kill your post, but the company took off during the real estate boom running the same type of commercials that you just saw.

I can't speak to Express Homebuyers situation, but I know of several similar companies, and they were all having trouble finding homeowners who had more equity than debt in their homes as far back as 2006. That is a sign of the times, though it was being noticed in late 2005 and then took off in 2006.

A lot of these companies went bust, but the ones paying attention saw what was coming a mile away. It's unfortunate that the i-banks completely missed it.

Posted by TD | April 21, 2008 10:21 AM

My parents are in the situation of outright owning their house, but the town just greatly increased assessments and taxes. (There's no way they could sell for close to what the town assessed them at, and the town isn't listening to all the people complaining about higher rates, since it's basically everyone--I'm not sure if their overvaluation is typical or an exception.)

So my parents, already squeezed, my mom retiring this year, decided now is the time to move to a milder climate with a lower cost of living. They put the house on the market, maintenance deferred. Of course, there's rather a glut of houses on the market. So something like this could really help them as time goes on if they don't get an offer.

It's not just people drowning in mortgage debt--folks like my parents have most of their "savings" in their house, and if it's impossible to sell a house, especially one that really needs work in the kitchen and bathrooms ($$$), then they can't pay off their outstanding debt (medical bills) and get into that more affordable, smaller, milder winter place. Their only asset a house they can't sell is a problem for younger people, too, who don't want to move out of their depressed town and walk away from their only investment.

Posted by Deborah | April 21, 2008 10:37 AM

Depending on the price they offer, it's not a bad deal. If you're losing $2K a month holding a vacant property on the market, you could take out some of that risk by shipping the property to a company specializing in pooling that type of risk (and avoid paying realtor fees). In actuality, I think these companies give lowball offers and are looking for people who can't meet their mortgage payment, but still have more equity than debt, so they really want to unload the property ASAP. This class of people is necessarily almost all stupid people b/c this is essentially taking a loss for cash flow reasons, which is not smart.

Posted by mpowell | April 21, 2008 10:42 AM

I little knowledge is always helpful before accepting a new media narrative hook line and sinker, in the case the 'Walkaway' and 'Jingle Mail' spins, from Calculated Risk:

The "walking away" story is a great place to think about this idea. What we have, so far, is a series of industry insiders making a general claim that "ruthless default" is on the rise. What we do not have, so far, is any rigorous quantification of the extent of this problem, or even any really detailed definition of what "a borrower who could afford to pay" is. We have no one offering baseline measures (what, for instance, a lender's analytical models might have predicted is the "normal" level of walking away), and hence no clear sense of the magnitude of the "change" in borrower behavior and attitudes (not to mention much rigor in distinguishing between the two).Hence, we don't yet really know if it's a change in borrower behavior as much as a change in definitions, servicer data collection and interpretation, or media exposure. Or a handful of anecdotes that are being pluralized into "data."

(Emphasis Added)

As they say Read the whole thing It's much better for you than consuming the latest CW in the beltway, Matt.

Posted by AJ | April 21, 2008 11:08 AM

Thank you Mr AJ; I did read the whole posting and it was worthwhile to be reminded that much-media-coverage is not the same as knowing all the facts.

Two thoughts in no particular order:

Where are those people who leave their homes going? Presumably they're not moving into Mom's basement. Presumably they're staying within a certain distance because that's where they're likely to work or to know the job market, have family, etc. Wouldn't corollary changes in rental markets be noticable?

The WashingtonMonthly website (the Kevin Drum often referred to by Matt) has a post and link to an LATimes article regarding increased house-fires (and car-fires) of homes-in-arrears. Seems like the oldest way in the world of paying off the mortgage in one fell swoop has occurred to enough people in California to make a statistical blip. As I posted in comments, it's the spontaneous combustion that happens when the mortgage rubs up against the insurance policy. (Gosh, I got to use that old joke twice in one day!!)

Posted by JohnMcC | April 21, 2008 2:25 PM

Is this new? I was in DC for the first time in a while this weekend and these signs are ALL OVER the NW. I took note of the situation as well.

Posted by scythia | April 21, 2008 9:20 PM

TD:
You are correct. We have been running TV ads, targeting sellers in financial trouble, since 2004. As investors, we do pay below market value. That being said, we usually get the seller anywhere from a few thousand dollars up to $200,000+ of their equity. Many times the alternative would have been foreclosure, where they would have walked away with zero cash. We continue to thrive when many of our competitors have gone out of business. A big reason why we are doing well is that we renovate our homes to standards way above neighboring houses and then price them aggresively. We sold 97 homes in 2007 with an average days on market of 34 days. The market in general experienced 100-250+ days on the market. This is testament to the quality and prices of our homes. You can see pictures of these renovated homes with gourmet kitchens at www.expresshomebuyers.com/sales.
Sincerely,
Brad Chandler
Founder and CEO

Posted by Brad Chandler | April 22, 2008 11:00 AM