Chicago Illinois Real Estate Blog

Two years ago, Jason Pietrucha read the foreclosure writing on the wall.

The mortgage broker saw California’s growing default rate and prepared for the home-loan tsunami to hit Illinois.

Switching to real estate sales, Pietrucha deals almost exclusively in properties in various stages of mortgage distress. He’s one of a growing number of agents and others who have adapted to the recast realities of real estate.

It’s playing out in many ways. Brokerages have rolled out foreclosure-training courses for agents and are listing foreclosures on their Web sites. Property-management companies have expanded their services to watch over the widening pool of vacant homes. Auctioneers sell hundreds of bank-owned homes in an afternoon. There are even do-it-yourself programs for troubled homeowners trying to stall the inevitable.

“We’re all trying to adjust to this new world,” said Tim Soper, an agent with Re/Max Pinnacle in Shorewood, one of a handful of Chicago-area entrepreneurs who organize bus tours of homes in or near foreclosure. The venture offers a rolling seminar on the foreclosure process while visiting the properties.

Soper estimates one-third of his business has shifted to foreclosures.

“You start looking and you say, ‘Wow, the sheer volume,’ ” said Soper.

That isn’t expected to change any time soon. Real estate data firm First American Core Logic said the number of bank-owned properties nationwide rose to 660,000 in April from 493,000 in January and 231,000 in January 2007.

In March, the company said, the number of investor and lender-owned homes in the Chicago region had similarly doubled, to more than 40,000, or 2.5 percent of housing here.

Terry Semmens, who heads the Chicago office of ZipRealty Inc., said his company, like many others, has been training its agents in the specifics of foreclosure sales in response to demand from consumers. He, too, estimates that one in three offers his firm handles is foreclosure related.

Though deals, indeed, can be had, they are neither as simple nor as cheap as many buyers expect, he said. Time-consuming and bureaucratic, foreclosures are a world apart from traditional home sales, he said.

“They’re not giving them away,” said Pietrucha, now an agent in Koenig & Strey GMAC’s Glenview office. “People see a list price [on a bank-owned home] and they think they can go 20 or 30 percent below that, and that’s just not the case.”

By the time they’re listed, the prices are less than those of comparable homes on the market, he said.

“In general, you’re getting them at 15 to 20 percent below market value,” Pietrucha said.

Jason and Nicole Finkelstein bought a foreclosed townhouse in Minooka that they say will cost them $40,000 less than comparable units. They submitted an offer for the bank’s full asking price and waited for a response. And waited.
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