Stretch SUV carries shoppers on tour of foreclosed homes

KENNEWICK — The sun glinted off the tinted windows of a shiny, black stretch SUV on a recent Sunday afternoon as a dozen people piled in for a real-estate tour.

But the six houses they were about to see weren't just any homes.

They were foreclosures.

And tour guide Willie Stewart was out to explain the advantages and differences of buying such a home.

Stewart, owner of Divine Realty in Kennewick, is an REO (Real Estate Owned by banks) agent, or one who focuses her business on listing foreclosed homes.

She and her staff came up with the idea for the tour during a brainstorming session to find ways to educate people about foreclosures for sale.

"You know, we need to show people that foreclosures aren't garbage," Stewart said of the inspiration to offer the free tours.

During the three tours she's had so far, a home inspector and a mortgage-loan officer have ridden along to offer tips and answer questions.

Foreclosure tours are an increasingly popular phenomenon in cities around the country.

A Google search for "foreclosure home tours" brings up thousands of hits for Web sites advertising tours in Arizona, California, Minnesota and elsewhere.

The tours, many of them by bus, are a marketing trend designed to sell foreclosed homes and stimulate the sagging housing market nationwide, according to a February story of Realty Times, an industry publication.

About 2.5 percent of all loans across the country were in foreclosure at the end of the first quarter of 2008, according to the Mortgage Bankers Association.

That's compared with about 2 percent one year earlier.

In Washington state, the association reported about 0.9 percent of all loans were in foreclosure at the end of the first quarter of 2008.

That's the most recent information available from the Washington, D.C.-based Mortgage Bankers Association.

Foreclosures up

Though the Tri-Cities housing market hasn't experienced near the foreclosure pain as areas in California and other parts of the country, Stewart said she's keeping busy with foreclosure homes.

Benton-Franklin Title Co. reported 64 notices of trustee sale in June, compared with 55 in June 2007.

A notice of trustee sale means a homeowner has 90 days to get his or her payments current or to sell the home before foreclosure.

The June notices brought the yearly total to 434, a 10 percent increase over the 393 notices of trustee sale during the first six months of 2007.

Through June 2006, Benton-Franklin Title reported 360 notices of trustee sale, which equates to about a 9 percent increase in 2007.

On her tours, Stewart shows prospective buyers a variety of homes ranging in price from less than $100,000 to $250,000 or more.

Jim Mahoney saw an ad for the tour and decided to give it a go. He'd been looking for a home for a while and is a subscriber to an online foreclosure Web site.

"I was surprised at the quality of some of the homes," he said. "I expected some real damaged property and I didn't see that. Most of them were pretty nice."

Mahoney said he will be moving to Pasco from Richland in a few weeks, but not into a foreclosure home. He does plan to keep his eye on the foreclosure market, however, in case a good rental property comes up for sale.

Rival runs safari

Stewart isn't the only one in the Tri-Cities offering educational tours of foreclosure homes.

Dana Mundy of AmeriChoice Home Loans in Richland launched Foreclosure Safaris on Saturday, which included a tour of eight homes and education on "the nuances of buying a foreclosure," she said.

She said she hopes it will "make the jungle of real estate a little less scary."

Many people don't know the fine print of buying homes at auction, so Mundy said she's teamed with local real-estate agents to help prospective buyers learn.

The Foreclosure Safari costs $19 for one person or $29 for a couple.

One of the appeals of buying a foreclosed home is that a bank-owned home involves no emotion, Mundy said.

And because many of the homes require some "sweat equity," Stewart said, the prices sometimes are lower.

"My grandma used to say you get what you pay for," she said.

Foreclosed homes often don't have nicely mowed lawns and may need new carpet, for example.

Financing for foreclosures can be more restrictive as well, Mundy said.