Right this way for repo-home tour

CHICAGO — The yellow-and-orange bus would stand out anywhere even without the giant letters proclaiming its purpose: RepoHomeTourChicago.com. A handful of buyers have shown up to board the 12-seat shuttle parked at a suburban shopping mall amid the drizzle on a recent Saturday morning.

As they take their seats, the home shoppers are handed a slick binder listing the repossessed properties they will see in the next 2 ½ hours. "Welcome to Chicagoland's Premier Foreclosure Tour," it says. "Today we visit Hoffman Estates and Schaumburg." A few minutes after 11 a.m., they're off.

Not long ago, many people viewed shopping for a foreclosed home as a distasteful act, a form of benefiting from someone else's misfortune and misery. As thousands of distressed properties have glutted the market nationwide, driving down home prices for the first time in generations, that stigma appears to have greatly lessened, or maybe disappeared.

Chicago-area real-estate broker Bill Diehl is hoping the demand for bargain homes is as strong here as it is in such places as California and Florida, where foreclosure auctions and bus tours have drawn eager crowds.

"It's a buyers' market. They've waited a long time for it," said Diehl, who has partnered with fellow ReMax agent Matt McCarthy to create RepoHomeTourChicago.com. "The reality is simple. This is going to be a great tool to get buyers back into the marketplace."

Diehl decides to address the uncomfortable issue head on before the question even comes up.

"Everybody wants to know where the people in the house went," Diehl tells the folks on the bus. "We don't know. Unfortunately, it's a national trend."

One rider, Pam Simpkins, is more than ready to move back into the market.

She owned a home when she was married, but since her divorce Simpkins has moved back in with her father in Streamwood, Ill. Now she is looking for a townhouse that she can afford on her own.

"I'm looking to buy. I'm willing to lowball and see what happens. You can only try," said Simpkins, who brought along a friend and co-worker to help her evaluate the properties. "Absolutely, it's a huge opportunity. It's a great market for me."

Dorothy Piotrowski has a different motive. She is looking for a low-priced property, something in the $200,000 to $250,000 range, that she can quickly rent out to earn income.

"I have two children that I want to put through college. I figure you can't lose with real estate," Piotrowski said. "It would be my first investment. It's a great time to buy."

First on today's tour, a two-bedroom, one-bath condo with attached garage in Schaumburg that has been foreclosed on by a bank. List price is $159,000, although no one is likely to pay that. When it comes to foreclosed real estate, buyers are comfortable offering 10 percent to 20 percent below list, prices that might offend individual homeowners.

It doesn't show particularly well. The doors on the kitchen cabinets are missing, and there's a cutout in the drywall of a second bedroom exposing a pipe, which suggests some kind of problem in the recent past.

Still, the consensus seems to be it's not a bad price, plus there's a walk-through from the garage to the condo and a common swimming pool.

The second stop is a single-family home in Hoffman Estates built in 1960 with three bedrooms, two baths and a price of $264,900.

This house isn't a foreclosure. It's a so-called short sale, in which the homeowners still own the property, although it is worth less than the mortgage debt owed. In a growing number of cases, lenders are allowing owners to sell properties for less than the outstanding mortgage because it saves them the time and expense of going through a court-supervised foreclosure.

On the downside, short sales often drag on and frequently fall through because lenders take so long to respond to offers. In this case, the owners have moved out, so there is no furniture or personal belongings to provide hints about what happened to the family.

As the bus moves among houses, mortgage broker Richard Kimball, who is making a financial contribution to the tour expenses in hopes of lining up borrowers, offers a short course on financing a foreclosed property.

"A lot of these properties won't qualify for traditional financing. Foreclosures aren't the nicest houses," he warned. "Some things like kitchen cabinets may have grown feet and walked away. Make sure your bank can do a rehab loan. If not, you may need to switch lenders."

Kimball thumps a long, heavy flashlight into his hand as he talks. A flashlight is a must for shoppers of foreclosed properties, he said, because often the power has been turned off, and sometimes wildlife has taken up residence.

As the tour progresses, it's hard not to wonder about the people who lived at these homes. A giant teddy bear sits at the bar in the rec room of a split-level in Hoffman Estates. There are still glasses on a rack above the bar, along with a pool table and foosball game.

A few days later, brokers Diehl and McCarthy say they are very satisfied with how the first tour went and are pleased that an offer may be forthcoming on one of the Schaumburg properties.

For a second, all-condo tour planned in downtown Chicago, RepoHomeTourChicago.com insisted that potential riders be prequalified by a lender, either Kimball or someone else.

"We want to make sure the people are really serious about buying a home," Diehl said.