All Aboard the Foreclosure Tour Bus
A creative sales tactic makes the foreclosure market accessible to buyersA group of people march single file off a bus and survey the place where they’ve arrived. As they walk forward, they scan the structure in front of them, murmuring comments to one another: “This one’s my favorite so far.” “It’s in surprisingly good condition.” Some even snap pictures.
With foreclosure rates hitting record highs across the country, real estate agents are getting creative in their attempts to move the increasingly large inventory of foreclosed homes. Hence, the “foreclosure tour” was born, allowing buyers looking for a bargain to view multiple foreclosed properties in one outing.
How It Started
The tours first took off in California, one of the states hit hardest by foreclosures. In cities like Stockton and Sacramento, savvy agents arranged for buses to transport buyers around the city, allowing them to explore a variety of homes. The concept eventually spread to other states that have been hurt by rising foreclosure rates, like Florida, Nevada, Michigan and Illinois.
Now, smaller markets have started taking a cue from the bigger states and are offering foreclosure tours of their own. In Knoxville, Tenn., real estate agents Marian Epps and Brooke Stanfill started tours after learning about the ones in California.
“Obviously we’re a very different market with less inventory, but we thought it would be neat if we could do that here,” Stanfill said.
Once a month, Epps and Stanfill take interested buyers to foreclosed homes in Knoxville, sometimes in a bus, sometimes in an SUV, depending on the number of people who have signed up. They try to vary the areas of Knoxville they target each month; the August tour included two houses in North Knoxville and two in West Knoxville.
Before leaving the Coldwell Banker office at 10 a.m. on Aug. 16, Stanfill warned the house hunters that the homes on the tour might not be perfectly clean or might have odors.
“Just keep that in mind,” she said. “These aren’t going to be perfect homes, but there are some great opportunities out there.”
The August tour in Knoxville was smaller than usual, with only three attendees. Stanfill says six to eight people is an ideal size for a tour, but smaller tours can be more personalized.
“If we have less people, we can cater toward them; if we have more, we can show a bigger variety,” Stanfill said.
Something For Everyone
The tour comprised of homes ranging from $78,000 to $138,900. With the range of prices came a range of conditions, from nearly move-in ready to needing a lot of work.
One stop on the tour, a three-bedroom, two bathroom rancher priced at $129,900, was move-in ready, with fresh paint and new carpet throughout. “This doesn’t look like a foreclosure,” one person commented.
The other homes needed a bit more work. One home -- the priciest and the largest on the tour at 2,052 square feet -- was in good condition but had shag carpeting and wood-paneled walls reminiscent of the 1970s.
While aesthetic updates are a relatively easy undertaking for most buyers, more serious damage can be daunting. In a $119,900 home on the tour, the carpet was peeled up to reveal a crack in the concrete slab.
“Cosmetic things -- carpet, paint, even replacing countertops -- I could handle that, but I wouldn’t want to get into structural damage,” Stanfill said.
By showing properties with a range of prices and conditions, the agents hope each of the tour-goers can find one that suits their needs.
“There are different kinds of foreclosures for everyone -- some people like to fix things up, others don’t,” Stanfill said.
For Epps and Stanfill, the tours have proven to be a worthwhile endeavor. Since they started the tours in March, several tours have resulted directly in sales.
For buyers looking to break into the foreclosure market, foreclosure tours can be a convenient way to see what's available and find a bargain.