Wheeling and dealing

House hunters taken on bus tour of foreclosed properties

Potential home buyers boarded a bus for a tour conducted by Century 21 C&S Properties in Stoughton. (Globe Staff / Matthew J. Lee)

STOUGHTON - The foreclosure crisis has come to this in Massachusetts: guided bus tours of bank-owned properties for sale, led by real estate agents drumming up business in a slow market.

In yesterday's downpour, a dozen bargain hunters boarded a shuttle to inspect deals to be had as financial companies are repossessing a record number of homes from owners who can no longer afford their mortgages. On a three-hour tour of five houses in Stoughton and Easton, they tromped across hardwood floors, inspected kitchens devoid of appliances, and marveled at clutter left behind by homeowners who fled in haste - or disgust.

But all saw what they came for: opportunities to snare a house in a quiet suburban neighborhood for about $300,000, or less.

"We could do a tour every day," said real estate agent Coleen Polillio, who organized the bus tour with co-worker Marlene Wasserstein. Polillio said people have already signed up for the next tour, in March, possibly in nearby Randolph.

Buyers, concerned that home prices have not yet hit bottom, are reluctant to close deals, even as the Federal Reserve's aggressive attempts to stimulate the economy have sent rates on 30-year mortgages to their lowest levels in more than two years.

Mortgage companies and real estate agents are drowning in homes. Between January and November 2007, lenders seized 6,970 properties from homeowners delinquent on mortgage payments, more than double the level in 2006. That does not include an unknown number of owners trying to escape costly mortgages through short sales. In these complex transactions, sellers who receive a low-ball offer for their house try to negotiate with the bank to accept less than they owe on the house to get out of their mortgage.

"There are so many houses," said Wasserstein, who first learned of foreclosure tours in California from an episode of "60 Minutes" on CBS. While Wasserstein and Polillio are top sellers in their office, Century 21 C&S Properties in Stoughton, they have had to hustle for buyers. Wasserstein said she believes her agency is the first in the Boston area to conduct such tours.

Cesar Dias, an agent from Stockton, Calif., who appeared on "60 Minutes" and is credited with starting a national trend, said foreclosure tours accomplish twin goals of moving properties and drumming up prospective buyers in lean times. "We knew we couldn't sit with our hands crossed hoping for the best," said Dias, who is working on tours in Dallas and San Diego; Las Vegas and Phoenix may be next.

Transactions on distressed homes may save buyers money, but they can carry a steep psychological price: They are far more complex to execute, because a third party - the bank or mortgage company that holds the mortgage - is involved. In a standard home sale, for example, buyers can require that a seller respond to an offer in, say, 48 hours. Banks or short sellers take weeks to respond. There also is a higher probability a lien exists on a property for unpaid debts, which can stymie a sale. And while buyers can inspect foreclosed properties, those properties often are in poor condition.

"Buyer beware," real estate lawyer Ted Silva warned, as the bus bumped along Stoughton's suburban streets. Silva, who said about half the deals he works on these days involve distressed properties, was invited along to advise prospective buyers.

It pulled up to a compact two-story house with mustard-yellow siding. The three-bedroom is being listed as a short sale for $255,000 by the owner, who paid $331,700 just over a year ago, using a high-interest subprime mortgage he could not afford. "I'm not the only one in this situation," said the owner, Mike, who did not want his last name to appear in the newspaper.

Clean and in good condition, the house had gleaming hardwood floors and a working fireplace; windows were new. "That's a nice bathroom," Kathy McLaughlin said, before going downstairs to the finished basement. She and her husband, Daniel McLaughlin, were looking for a smaller house or one for their oldest son.

The basement was a seamstress's workroom, strewn with half-finished women's blouses stacked on the carpeted floor. "The nice thing about seeing properties today is you can see if the basement's dry," Polillio observed.

Sharif Davis was also on the tour, with his longtime girlfriend and roommate, Dawn Skowronski. With prices down, the couple is thrilled at the prospect of buying a single-family home. First-time buyers, they shopped for condominiums a year ago but could barely afford what they wanted, once monthly condo fees were added to a mortgage payment. Davis is an account-services representative for New Balance in Brighton, and Skowronski is a Quincy paralegal.

The couple liked the next house on the tour. With its renovated bathroom, modern kitchen and generous lot, it was everyone's favorite. The blue-shingled, raised ranch with four bedrooms listed for $321,900. As the bus pulled up, Polillio warned that the previous owner had stripped out all the appliances. The Stoughton house is being sold by Countrywide Mortgage, which repossessed it from a buyer who paid $357,000 in July 2005.

And it was in Davis and Skowronski's price range, especially since distressed sellers often are willing to negotiate.

But Skowronski thought the kitchen would need work. "I need more counter space. I like to bake," she said.

Next up, a beige ranch in Stoughton, was in disarray, with baby gear piled on the couch. The owner is offering the property in a short sale for $279,900. "Very small," Natick resident Perry Galvin and Brookline resident Harry Finkle, said, virtually in unison, as they walked through the cramped living room.

The gawkers descended to a basement in even rougher condition. "This is a good price," Wasserstein reminded the buyers.

Back on the bus, Galvin, an employee of Draper Laboratory in Cambridge, said he took the tour to educate himself. He owns a condo but may sell it to buy a house. As the bus rumbled toward Easton, he leaned over and told Silva, "You've got to be careful where you buy. You know anything about Easton?"

At the next house, a raised ranch in Easton, Galvin declared, "The deck's the nicest part of the house." At the second Easton house, a woman in a pink bathrobe emerged from the front door and yelled out to bus parked on the street.

"Not today - goodbye," she said, slamming the door.

As the tour wound down, riders got punchy and the bus driver got lost. They chuckled as they passed a garish pink-and-red gingerbread house.

Inside the last house on the tour, a poorly maintained red split-level about 100 yards from a pond, some cringed at the fungus inside the refrigerator. Galvin pointed to an electrical outlet rimmed in black and asked, "Fire?" Taking stock of the property, his Draper co-worker, Michael Conroy, a some-time property investor who is searching for a fixer-upper, saw potential for "water issues." He pointed toward the pond and a hill in the backyard, which sloped toward the house.

Getting back on the bus for a final time, Polillio imagined a variety of future tours - foreclosed condos, foreclosed multifamilies, or Randolph's ample supply of foreclosed properties. "The next tour," she said, "is going to be a lot longer."

Kimberly Blanton can be reached at blanton@globe.com.