Buying Foreclosures: Great Bargains for Some, Headaches for Others
Banks across the country are faced with a glut of residential properties on their books after their mortgage holders stopped paying their notes, for whatever reason. The national foreclosure crisis - regardless of Foreclosuregate - would have buyers hoping for real estate bargains, but it's become national news on how many folk out there are finding foreclosed properties to be fabulous bargains.
Looking for that Foreclosure Bargain
This week, ABC News covered how easy it is for prospective home buyers to search online for foreclosure properties put up for sale by banks and other financial institutions - and how current mortgage rates could make the purchase a smart decision for many.
However, they did more than just tell the tale, they also provided a list of several websites where foreclosures are listed for possible buyers to surf through, omitting the need for an agent (at least at the initial stages):
- RealtyTrac (www.realtytrac.com) - this site targets those looking for a foreclosure deal, and promotes membership in its site for those looking for "foreclosures, short sales, auctions, and bank-owned homes up to 25-30% below market value!"
- GoogleMaps (www.googlemaps.com) - choose "real estate" under the "search options" of Google Maps, and you will be given the opportunity to search for properties for sale by a variety of criteria, including whether or not the homes have been subject to foreclosure;
- Zillow (www.zillow.com) - this commercial site not only lists homes for sale, it collects property values from local taxing authorities and sometimes provides its own "zestimate" of the fair market value of a property.
- HomePath (www.homepath.com) - a site owned and operated by Fannie Mae, listing all their Fannie Mae- owned properties available for sale.
Add to this list another site, ForeclosureRadar, which also offers up to the minute auction information among lots of other foreclosure-related information for both financial institutions and individual investors alike.
Buyer Beware: If It Seems Too Good to be True, Maybe It Is
Finding a bargain is an American tradition and no one is (or should be) disrespecting anyone trying to find a deal in the midst of ForeclosureGate. These buyers are important to the economy, sure, but they're also important to the banks who want to get real estate off their books in lieu of long term loans.
However, the risks can be far more than a failed home inspection or a faulty appraisal (they missed the termites, no one noticed the cracked pool): here in Florida, the frenzy to grab up real estate steals has added to one more legal mess.
As reported in the Palm Beach Post last week, buyers at auction were thrilled to take ownership of homes for as little as $200.00 - less than the cost of a new television set or netbook computer. And they were buying very nice homes: some of these properties sold for as much as a quarter million ($250,000) before home prices plunged.
The auction? A December 8, 2010, auction of properties where the Law Offices of David J. Stern was involved in the process. Problem for some bargain buyers - yes. Apparently, some of the homes were sold without the proper legal notice and now, there will be a problem issuing title to them.
Betcha this isn't the only occasion where we'll be seeing this sort of thing.