Foreclosed-upon properties are a “Pandora’s box,” says Grace Sharp. You never know what you’ll find when you open them.
Sharp opens them because she and her husband, Paul, own Britannia Development Company of Wayzata. Britannia secures, maintains, and repairs foreclosure properties—the industry term is “real estate owned” or REO properties—while banks try to sell them.
On paper, Britannia is 21 years old, founded in Los Angeles by Sharp and her British husband (hence the company name). But the market for Britannia’s services is cyclical, to say the least, and the company has gone “dormant” more than once. The Sharps revived it again in September 2007, just after they moved to Wayzata.
What they find when they open some properties is evidence that “a lot of negative emotions can be involved” in foreclosure, Grace Sharp says. The house might be stripped of appliances, light fixtures, trim and baseboards, and anything else that could be pried out. Or marijuana might be growing in the basement. Or a squatter might be living there.
“We went to inspect one property, and it turned out that another foreclosure agent had moved in—another REO agent like us,” Sharp says. The man evidently had lost his own home and was hopping from one foreclosure property to another.
In fatter times, Sharp focuses solely on selling homes as a realtor. (She currently sells REO properties in Minnesota as an agent for Market Link Realty of Eagan, though none of them are properties that Britannia maintains.) When foreclosures are up, Britannia comes out of mothballs and does a booming business.
As someone who sees the foreclosure picture from more than one angle, what is Sharp’s business plan for the next 12 months?
She has 18 people working in her Wayzata office, four on the sales side and the rest for Britannia. She expects to double her staff within a year to boost Britannia’s capacity from 1,000 properties to 2,000. (As of June, Britannia was maintaining—with the help of contracted partners—about 800 properties: 200 in Minnesota, the rest in California, Florida, Arizona, and Nevada. As of April, 7,674 Twin Cities properties were in foreclosure or in a lender-mediated short-sale process.)
The peak has passed for subprime foreclosures, Sharp says. The next year will see a wave of prime-mortgage defaults by people who’ve lost their jobs in the recession. She expects that we won’t see the bottom of the foreclosure mess—what for Britannia would be the top—until mid-2010.
