Busloads of home buyers are hopping aboard the foreclosure bandwagon in search of bargains, and real estate agents and brokers are supplying the wheels and deals in markets across the country.
Ruth and John Ahlbrand, who own and manage RE/MAX Central, a Las Vegas brokerage company, bought a 40-seat luxury coach and wrapped it with advertising that features their TourVegasHomes.com Web site and the company’s phone number.
Last month, they began offering free real estate tours of bank-owned foreclosure properties and builder-discounted new homes in the Las Vegas area. The bus trips are free and include lunch.
The company advertises the tours in Spanish- and Chinese-language newspapers and offers multilingual tours.
There are slideshows after the tour that educate participants about the buying and selling process, and agents that accompany the tours can write up purchase contracts on the spot, said Ruth Ahlbrand.
An ad on the bus offers a free Sony high-definition television with each home purchase.
"The response from consumers is tremendous. We have first-time home buyers, people who want to move up, and we have investors — it’s pretty much across the board right now," she said. When the tours began, most of the passengers were from out of state, Ahlbrand said, though that trend has flipped.
"The bus is its own billboard. We run the bus everyday. (We drive it) through the Strip, we go to shopping centers, and we pass out invitations to join the tour. We actually use the bus as a major part of our advertising."
Group tours of foreclosure properties are gaining traction in other cities, too — from San Diego to Orlando — as real estate professionals work to drum up business in a down market while catering to price-conscious consumers.
It’s no surprise, as foreclosure activity has climbed to record levels. The Mortgage Bankers Association reported this month that loans entered the foreclosure process at a record rate in fourth-quarter 2007, and the group’s economist expects the rate of foreclosure to grow more. And foreclosure data provider RealtyTrac reported last month that the volume of U.S. foreclosure filings rose about 57 percent in January compared to the same month last year.
A January segment on the news program "60 Minutes," which chronicled the mortgage-market mess and the foreclosure problem, highlighted a shuttle bus tour of foreclosure properties in Stockton, Calif.
The weekly "Repo Home Tour" bus, operated by Realtor and loan specialist Cesar Dias of Approved Financial & Real Estate Center in Stockton, has also been profiled by other national and international news outlets.
A sister company in the San Diego area also offers tours of bank-owned foreclosure properties, also known as real-estate-owned, or REO, properties.
David Torres, a real estate agent for Century 21 Solutions Realty in Orlando, said he learned about the bus tours in California and decided to give it a try.
"It’s definitely a buyer’s market," he said. "Interest rates are low — we’ve got to get people to buy homes. We’re just trying to create that awareness."
The first Orlando Homes Tour is scheduled on March 22 and will visit eight to 10 foreclosed homes in two to three hours. The tour is free and includes a 15-minute presentation and a light breakfast.
"A guide package will also be provided on the tour with a summary of the homes that will be viewed, with location and price range included," according to the company Web site.
Torres said that a home inspector and a loan specialist will attend the tours to answer buyers’ questions. The first tour will feature homes that are generally in the $200,000 to $300,000 range at the east side of Orlando. Properties will be selected based on buyer preferences, he said.
So far, the planned tours have drawn interest from investors and first-time home buyers who live in the state, he said.
Torres said his interest is in working as an agent for buyers, and he also hopes to establish relationships with banks to sell REO properties as a listing agent.
Rick Murray, the broker for Discount Real Estate & Lending, a real estate and mortgage company in Santa Clarita, Calif., specializes in foreclosure properties and offers group home tours of REO properties.
The tours focus on five areas in the Santa Clarita Valley, including Palmdale, Lancaster and Castaic.
"We are bringing the buyers in for these good opportunities," he said, citing the example of a 17-acre ranch that had its price whittled down from about $1.6 million to $600,000.
"It’s exciting but pretty damn depressing," he said, as home values are suffering in the community.
The shuttle bus tours typically draw about 10-12 folks, he said, and many of the interested buyers are first-time buyers from outside of the area who had previously been priced out of the market. He launched the tours at the end of December.
While many of the real estate brokerage-led home tours are free, a pair of real estate investors in Michigan are charging passengers for guided tours of foreclosed properties.
Rodney Townsend and Ralph Claxton, real estate investors and co-founders of Foreclosure Bus Tours, offer full-day tours for $97 that includes real estate investment tips.
Townsend said that they show their own properties during the tours, and have also worked with real estate agents and other investors to open up their properties to the tours, which they are offering in other parts of the country.
Investor bus tours are scheduled in Phoenix, Ft. Lauderdale and Boston, he said.
Ruth Ahlbrand of RE/MAX Central in Las Vegas said she has worked with foreclosure properties to varying degrees for about 10 years. Now that that market has grown so much, the company has a team devoted to foreclosure properties.
But it’s clear that the foreclosure boom, which followed a rapid run-up in home construction, pricing and sales, is not without end, she said.
"We see the foreclosure market will subside greatly. I think we’ve hit the bottom," she said. "In the fourth quarter of last year the banks started doing drastic reductions. That’s when the market started to move again."
In December, about 40 percent of all home sales in the area were sales of REO properties, she said, and that ratio held steady in January and February.
Las Vegas keeps adding hotel rooms, and with all of the people and projects coming in Ahlbrand said she expects the market is on its way to recovery.
What does that mean for the bus tours of foreclosure properties?
"I think we’ll get to the point that we use it for touring people to the high-rises or the new-home developments that will spring up again," she said.
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