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RealtyTrac, Inc., the leading online marketplace for foreclosure properties, provides all the resources that home seekers, investors and realtors need to locate, evaluate and buy properties at below market value. Founded in 1996, RealtyTrac sets a new standard for online real estate services by offering the largest database of pre-foreclosure and foreclosure properties, with more than 500,000 properties across the country, comprehensive property data, productivity tools and extensive professional resources. RealtyTrac hosts close to 2 million unique visitors monthly, and is the exclusive foreclosure data provider to AOL, Home Gain, MSN House and Home, The Wall Street Journal Real Estate Journal and Yahoo! Real Estate.
Buying a Foreclosure Property Below Market Value: Five Tips from the Pros
House hunting can be a very daunting experience, especially in today’s real estate market. Both investors and home buyers have been priced out of the market by escalating costs, and good real estate deals are increasingly difficult to find.
But there are bargains out there, for people who know where to look.
“For people willing to do some homework, the foreclosure market offers some of the best opportunities in real estate today,” explains James J. Saccacio, chief executive officer at RealtyTrac, the leading online foreclosure marketplace.
Web-based services such as RealtyTrac give consumers access to foreclosure and pre-foreclosure information that was previously available only to professional real estate brokers and investors. Today, homebuyers can use these services to assist them identify and research potential home purchases, as well as the tools and professional resources they need to help them close the deal.
With interest rates ticking up and ARMs adjusting upward, experts predict an increase in the number of foreclosure properties on the market. RealtyTrac, which provides all the foreclosure data for both MSN House and Home and Yahoo! Real Estate, has already compiled a list of over 550,000 foreclosure properties across the country.
“Foreclosure properties can be a terrific investment, or give home buyers a much more affordable option than traditional properties,” notes Saccacio. “But they’re not a way to get rich quick, and a foreclosure purchase needs to be approached in an educated, intelligent manner.”
Saccacio offers five tips to help you close a deal on a foreclosure property:
1. Learn about the different types of foreclosure properties, and the foreclosure process.
There are three basic types of foreclosure properties, representing different stages in the foreclosure process: notice-of-default (NOD) and notice of trustee sale (NTS), which are both pre-foreclosure properties; and real-estate-owned (REO), a foreclosure property which has been re-purchased by the bank.
For most consumers, buying a pre-foreclosure property from a private homeowner is the best option. It’s important that both the buyer and the seller see the situation as a win-win situation, in order to ensure a smooth process. In this case, the seller is able to get out from under a mortgage without destroying their credit rating, the lender is saved the time and expense of foreclosing on the property, and the buyer gets a below-market price on a home.
Foreclosure auction sales are typically the domain of the professional investor. These properties are formally in default, and sold to the highest bidder at an auction. Buyers are required to be physically present at the auction, and must pay 100% of the sale price in cash, on the spot. Though foreclosure auctions can offer significant savings, they are not for the feint of heart or the uninformed. Unless the buyer is already familiar with a particular property, there is usually little time to examine it. And the buyer will be competing against professional investors—and sometimes even the lender—at the auction.
Once the lender officially reclaims a home, it becomes a real-estate-owned property (REO). While REO properties typically offer more time for evaluation and a more standard bank-managed transaction, their prices are usually very close to full retail market value.
CHART: Stages of the foreclosure process
Stage
Positive
Negative
Pre-foreclosure:
Notice-of-Default,
Notice-of-Trustee Sale
- Highest potential savings
- Potential win/win scenario benefits all parties
- Chance to evaluate property
- Buyer / Seller negotiations can be difficult\
- Time pressure to complete transaction before auction
Foreclosure:
Auction sale
- High potential savings
- Immediate property ownership
- 100% of the sale price required in cash
- No time to evaluate property
- Competing with professionals
Foreclosure:
Real Estate Owned (REO)
- Affords significant time to evaluate property
- Traditional bank financing
- Lender often rehabs property
- Lowest potential savings
2. Secure financing early
It’s important for a buyer to be pre-qualified before engaging in discussions with a seller. This ensures that the buyer is in a financial position to purchase the property, and is in the strongest possible position to negotiate. It’s best to work with a lender who understands the foreclosure process, and can guide the buyer through certain steps, such as ensuring that a property is FHA-compliant. Another reason to consider pre-qualification is that not all lenders finance foreclosure properties. Having approved financing in-hand makes negotiations with both the seller and the lender easier, and may even make it possible for the buyer to simply cure the default and take over the existing loan to reduce loan processing fees.
3. Engage a real estate agent as a “buyer’s representative”
Most people hire a real estate agent to sell their home. These “seller’s representatives” are charged with making the sale and negotiating the best deal for their clients. “Buyer’s representatives” have the home buyer’s interests at heart, and are charged with finding the right property and negotiating the best price for their clients. Picking the right real estate agent will make a buyer’s life much easier. There are agents who specialize in the foreclosure market, with specific experience in REO properties. Look for an agent with foreclosure transaction experience, as well as knowledge of local, regional and state laws. But it’s also important to consider the agent’s knowledge of the area; their ability to close a deal; and their access to other professionals (attorneys, lenders, mortgage and title professionals) to ensure that the buyer is in good hands.
4. Do your homework
Stocks offer higher potential returns for investors than traditional savings programs, but are also riskier. Similarly, purchasing foreclosure properties is somewhat more risky than buying traditional real estate properties, but offer much higher potential savings. With the right examination and due diligence, buyers can significantly reduce the risks. It makes sense to give any property under consideration a thorough examination. Here are eight steps for doing a professional-level exam.
CHART: Examination process steps
· Identify desirable neighborhoods – Identify specific neighborhoods where you’d like to live or own a home. This will limit your search to a manageable size for you and your real estate agent, and give your a sense of relative property values.
· Cast a wide net – There are a number of Web-based services that can put hundreds of thousands of foreclosure properties at your fingertips. Since the best savings are often found in pre-foreclosure properties, it’s important to check the percentage of pre-foreclosure (vs. REO) properties in any database before subscribing.
· Determine the property value –Look at the original purchase price, and recent comparable property sales to determine the current value of the property.
· Find out the amount in default and the remaining loan balance – In order to determine a reasonable offer price, you’ll need to know—at a minimum—how much money it will take just to satisfy the debt to the lender.
· Run a legal investing report – Before purchasing any foreclosure property, make sure it is free and clear of any bankruptcies, tax liens or other financial liabilities.
· Assess the condition of the property– If at all possible, visit the property, ask your realtor’s opinion, and review pest and structural reports to make sure that the property is in acceptable condition, or to determine how much of a rehab budget you’ll need to build in to your deal.
· Build a positive relationship with the seller – Before purchasing the property, try to make sure that you’re entering into a win-win situation with the seller, so that they’ll do what they can to make the process easier and leave the property in good condition
· Leverage your timing – Knowing when a property is going to be auctioned gives you an extra bargaining chip when negotiating with the seller or the lender.
5. Make a realistic offer
Despite what you may see on late-night cable TV, investing in foreclosure properties isn’t a sure fire “get rich quick” formula. Lenders aren’t likely to give properties away, particularly in a real estate market where prices continue to rise. And homeowners in financial distress may be difficult to deal with, particularly early in the foreclosure process. The keys to a successful foreclosure property purchase are diligence and patience.
As a rule of thumb, the best savings can be made at the pre-foreclosure stage, where home owners can avoid a foreclosure and lenders can save the time and cost involved in going through the process. Another critical point in the process is immediately prior to the auction date, when all parties might be most open to a last-minute solution. It’s not unusual to save from 10-30% of the market value on a foreclosure property, and certain properties offer savings of 50% or even more. An educated buyer—one who knows how much is owed on the property and what its market value is—can usually come up with a realistic offer; one that offers significant savings, while meeting the requirements of the lender.
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Now go out and familiarize yourself with the resources and tools available to take advantage of the opportunities offered by this formerly-hidden real estate market. With the experts pointing toward significant growth in available foreclosure properties, there’s never been a better time to line up your resources and get informed.
foreclosures - Yahoo! News Search Results
foreclosures - Yahoo! News Search Results
FORECLOSURES INCREASE FROM DECEMBER TO JANUARY
Both completed foreclosures and the number of San Diego property owners who started the foreclosure process increased in January from the end of 2011, but those numbers are down compared with figures from a year ago, real estate tracker DataQuick reported Tuesday.
Foreclosures climbed in January
Foreclosures picked up in January, yet another sign that the nation's huge glut of delinquent homes may soon start making their way onto the market.
Are foreclosures easing in San Diego County?
Are foreclosures and foreclosure starts trending downward in San Diego County? Here's a look at the latest numbers.
Minnesota foreclosures drop 17 percent in 2011
The study counted about 21,300 foreclosures in 2011, down from more than 25,000 the year before, marking the fewest foreclosures the state has seen since 2007
Foreclosures plummeted last year
Tri-Town foreclosures In Boxford , the number of foreclosure auctions declined from 29 in 2010 to only 11 in 2011, a 62 percent decine . Middleton also saw a decline in auctions, down 11 percent with 36 auctions in 2010 and 32 in 2011. Topsfield saw 18 foreclosure auctions in 2010 and just one less a year later with 17 auctions recorded.
Mortgage-Audit Firm -- Surprise! -- Finds Lots of Errors in Foreclosures
A California study of foreclosures found widespread errors, but not the type that directly affect borrowers.
Foreclosures down 55% from ?11
Clark County foreclosures reached their lowest monthly level in four years in January, a slowdown local professionals say could signal the worst is over.
US foreclosures edge up in January
Banks took more US homes in month. 16 Feb 2012 6:00 PM
Foreclosures remained high for Kent, Ottawa and Allegan counties last month
One out of every 323 housing units in Kent County got hit with a notice of default, auction sale, bank repossession or some other foreclosure filing in January.
California Audit Finds Broad Irregularities in Foreclosures
The findings of San Francisco county officials suggest how pervasive irregularities may be across the nation.
Newsfeed display by CaRPforeclosures - Google News
Google News
National Foreclosure Settlement: Several States Using Funds From Deal To Clos...
National Foreclosure Settlement: Several States Using Funds From Deal To Close ...
Huffington Post
He's not the only politician eyeing the cash for purposes that have nothing to do with foreclosure. Like a pot of gold in a barren field, the $25 billion deal offers a tempting and timely source of funding for state governments with multimillion-dollar ...
and more »
Past foreclosure means waiting years for new loan - Boston.com
Los Angeles Times
Past foreclosure means waiting years for new loan
Boston.com
By Alex Veiga AP Real Estate Writer / February 22, 2012 LOS ANGELES?Next to filing for bankruptcy protection, nothing wrecks your chances of qualifying for a home loan like a foreclosure. And if you got out from under an oppressive mortgage through a ...
Case may void foreclosuresSouthCoastToday.com
Seizures Threatened in Massachusetts With Naked Loans Challenge: MortgagesBloomberg
Feds Triple Incentive to Reduce MortgagesHousing Predictor
all 449 news articles »
Florida Weighs a Measure to Ease Way to Foreclosure - New York Times
Opposing Views
Florida Weighs a Measure to Ease Way to Foreclosure
New York Times
MIAMI ? Hoping to speed up and streamline Florida's lumbering foreclosure process, state lawmakers are considering legislation to make it easier to foreclose on abandoned properties and force lenders to move more quickly to complete foreclosures.
Foreclosures Up Last Month, Could Rise Even MoreOpposing Views
Foreclosure Activity Increases 3% in JanuaryGlobeSt.com
all 4 news articles »
Dozens Rally Against "Rampant Foreclosure Abuse" At SF Wells Fargo - The San ...
The San Francisco Appeal
Dozens Rally Against "Rampant Foreclosure Abuse" At SF Wells Fargo
The San Francisco Appeal
by Bay City News 11:04 AM: Dozens of clergy members and community activists rallied today outside the headquarters of Wells Fargo Bank in San Francisco in protest of what they say is rampant foreclosure abuse. The action comes after the release last ...
Slideshow: Clergy target Wells Fargo in Ash Wednesday protest over foreclosuresBizjournals.com (blog)
Clergy Members Plan Foreclosure Protest Outside Wells Fargo WednesdayKRON 4
NY To Require That Banks Send Decision-Makers, Not Mouthpieces, To Foreclosure ...The Consumerist (blog)
Greenwich Citizen
all 31 news articles »
Realtors Slam Obama Foreclosure-Rental Plan - Wall Street Journal (blog)
Realtors Slam Obama Foreclosure-Rental Plan
Wall Street Journal (blog)
For several months, Obama officials have been studying ways to rent out foreclosures owned by the Federal Housing Administration and government-controlled mortgage giants Fannie Mae and Freddie Mac. Earlier this month, a US housing regulator invited ...
Housing's Dilemma: There's Not Enough To BuyCNBC.com
Home Prices Lowest in 10 YearsBusiness 2 Community
all 3 news articles »
Sales of Previously Owned US Homes Increased in January - BusinessWeek
eCreditDaily.com
Sales of Previously Owned US Homes Increased in January
BusinessWeek
Nonetheless, the Federal Reserve and Obama administration are striving to find ways to lend the industry additional assistance amid concern mounting foreclosures will continue to hinder the recovery. ?It's not a huge improvement, but at least we're not ...
Foreclosures, 'Short Sales' Fuel Existing-Home Sales SurgeeCreditDaily.com
Existing home sales up, inventory down -- for nowCBS News
Home supply signals 'mini-recovery'Palm Beach Post
Bloomberg -msnbc.com
all 646 news articles »
AG: Foreclosure victims should be ?outraged? by settlement - Nashua Telegraph
AG: Foreclosure victims should be ?outraged? by settlement
Nashua Telegraph
Delaney said that amount is hardly enough for those facing foreclosure to economically get back on their feet. ?Foreclosure victims who were harmed by these banks should be outraged,? Delaney said. ?In no way does this settlement interfere in any way ...
and more »
Courts to Hasten Efforts To Prevent Foreclosures - New York Times
New York Times
Courts to Hasten Efforts To Prevent Foreclosures
New York Times
New York State's courts, frustrated by delays in thousands of foreclosure cases, are planning to speed them along in a new program that would give judges added control and require banks to send officials who have the power to alter loans to keep people ...
Foreclosure Process, Fraught with Errors, Leads Borrowers to Fight Back - Bra...
Foreclosure Process, Fraught with Errors, Leads Borrowers to Fight Back
Bradenton Herald
Operation Reach 1 is the only loan modification and foreclosure rescission company to be awarded an A rating by the Better Business Bureau. Thanks to Operation Reach 1, foreclosure has not been the end for many borrowers. Calling for transparency in ...
and more »
S&P Sees Foreclosure Inventory Improving In Coming Quarters - Wall Street Jou...
S&P Sees Foreclosure Inventory Improving In Coming Quarters
Wall Street Journal
Standard & Poor's Ratings Services expects slow but gradual improvement in the foreclosure inventory in the upcoming quarters as the percentage of US residential mortgage delinquencies and new foreclosures declined in the fourth quarter from the third ...
and more »
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