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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.
Yahoo! News Search Results for foreclosures
Yahoo! News Search Results for foreclosures
Foreclosures up in NEGA
For the first nine months of 2010, foreclosures in Barrow, Jackson, Madison and Banks counties are running ahead of 2009 at the same point. In Jackson County, foreclosures are up 10 percent year-to-date at 1,162, up 109 over 1,053 at the same point last year.
Foreclosures
These are mortgage foreclosures filed with the civil division of the Circuit Court for Jan. 19 through Jan. 27. Names in bold are the subject of or have an interest in the foreclosure action. Lighter names filed the foreclosure action.
Collin County foreclosures down for quarter, up for month
Home and business foreclosures offered a mix of good and bad news for Collin County homeowners for the quarter and the month.
PROPERTY FORECLOSURES 9/5/10
The following foreclosures recently were filed with the Jackson County Clerk?s office at the courthouse in Brownstown. Complaints are assigned to Jackson Circuit Court or Jackson Superior Court I through a random drawing. The new filings include:...
Foreclosures mount in Idaho
Home foreclosures are climbing in the Northwest and Midwest, areas that had earlier dodged the worst of the mortgage crisis, according to real-estate data firm RealtyTrac.
Foreclosures driving down property values
Romy Fernando wants to sell his house in Grant so he and his wife can move to a condo in Orlando, closer to their son. But he has lots of competition, including 18 short sales or foreclosures listed in his neighborhood.
Liens, foreclosures and bankruptcies 9/5
EDITOR?S NOTE: The Mesabi Daily News today starts publishing information about foreclosures, bankruptcies and liens in our area. The information will be published as part of the public record every other Sunday following release of the St. Louis County Financial Record, which is published biweekly.
Foreclosures up in Northeast Georgia
For the first nine months of 2010, foreclosures in Barrow, Jackson, Madison and Banks counties are running ahead of 2009 at the same point. In neighboring Jackson County, foreclosures are up 10 percent year-to-date at 1,162, up 109 over 1,053 at the same point last year.
Foreclosures soar in Mass. in July
More than 1,200 Massachusetts homeowners lost their properties to foreclosure in July as the sluggish economy and high unemployment keep pushing the number of homes taken back by lenders toward what could be a record high this year. Foreclosure - Real estate - Unemployment - Massachusetts - Business
Scotts Bluff County is not immune to foreclosures
Request a three-month list of home loan defaults from the Scotts Bluff County Register of Deeds and you?ll get a list of more than 75 homes. Foreclosures aren?t just hitting Phoenix, Detroit and Los Angeles, but are here at home as well.
Newsfeed display by CaRPforeclosures - Google News
Google News
AP analysis: Economic pain failed to ease in July - The Associated Press
AP analysis: Economic pain failed to ease in July
The Associated Press
States hardest hit by foreclosures ? Arizona, California, Florida and Utah ? also suffered the biggest month-to-month jump in bankruptcy filings in July. ...
and more »
Lehman Estate Seeks Foreclosure on Ritz Kapalua - Wall Street Journal
Lehman Estate Seeks Foreclosure on Ritz Kapalua
Wall Street Journal
The venture and Lehman have been negotiating for months and those talks will continue as the foreclosure case moves through the court process. ...
and more »
Churches Praying to Stop Their Own Evil Foreclosures - LoanSafe
AllGov
Churches Praying to Stop Their Own Evil Foreclosures
LoanSafe
As a result, thousands of US Churches can no longer pay their mortgages as they sink deeper into foreclosure. According to the US Census, ...
Church Foreclosures Triple in Less than 3 YearsAllGov
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Foreclosures cause adverse health effects, study shows - Credit.com News
Credit.com News
Foreclosures cause adverse health effects, study shows
Credit.com News
By Credit.com Staff Homeowners who have defaulted on their mortgage loans, putting them in danger of foreclosure, are undoubtedly worried about their ...
Foreclosure can lead to illnessToledo On The Move
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Unkept Promises For Homeowners Facing Foreclosure - MyFox Houston
MyFox Houston
Unkept Promises For Homeowners Facing Foreclosure
MyFox Houston
HOUSTON - For months, Houston-area homeowners on the verge of foreclosure flocked to a southwest side office building. "I was several months behind," said ...
Florida's High-Speed Answer to a Foreclosure Mess - New York Times
Mother Jones
Florida's High-Speed Answer to a Foreclosure Mess
New York Times
Florida has a huge backlog of foreclosure cases. In a temporary courtroom in Fort Lauderdale, Senior Judge Robert Newman, right, worked on one of them. ...
NYT Rides The "Foreclosure Express"Mother Jones
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Short sale alternative to foreclosure? - Times Herald-Record
Short sale alternative to foreclosure?
Times Herald-Record
The bank is waiting to find out if the homeowners have been approved for the federal Home Affordable Foreclosure Alternatives program, Richard Simon, ...
'Holistic' approach to foreclosure crisis urged - Boston Globe
Boston Globe
'Holistic' approach to foreclosure crisis urged
Boston Globe
(Jonathan Wiggs/Globe Staff/File 2010) By Robert Gavin Federal and state policy makers should take a broader approach to the foreclosure crisis, ...
RPT-Communities key in foreclosure fight-Fed's RosengrenReuters
Foreclosures impact kids, communitiesMarketWatch
Hub Fed head: Rich towns must help poor ones fight foreclosureBoston Herald
IMarketnews.com -Real Estate Journal Online (blog) -Advanced American Media Project (press release)
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Get the numbers on Rock River Valley's foreclosures - Rockford Register Star
Get the numbers on Rock River Valley's foreclosures
Rockford Register Star
Alex Gary crunches the numbers that make up the local economy. He covers the banking, real estate, aerospace and auto industries. ...
The FHA's 'Short Refinance' Program: Frequently Asked Questions - Wall Street...
Digital News Report (blog)
The FHA's 'Short Refinance' Program: Frequently Asked Questions
Wall Street Journal (blog)
On Saturday, we looked at the newest effort by the Obama administration to address the threat of foreclosures from borrowers who are ...
Home Loan Modification Bailout Program - Find out how you can save your home NowStock Markets Review
Wells Fargo Alternative Modification Plans Outside Of Making Home Affordable ...Red, White, and Blue Press (blog)
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