Foreclosed homes are regularly set on the market by the two major home lenders: government agencies and banks. Be they government foreclosures or bank foreclosures, what matters most is that they can be purchased at expenses lower than their real market value. This is why homebuyers or investors generally are in haste as soon as a reliable foreclosure opportunity is listed. After having investigated the real estate market and its potentialities, homebuyers must move quickly if they want to grasp this temporary chance. In what follows we will see some of the basics and advantages of opting either for government foreclosures or for bank foreclosures.

The most popular government agencies that frequently market foreclosure properties are as follows:
1) the U.S. Department of Housing and Urban Development (you are probably already familiar with HUD foreclosed homes);
2) the U.S. Department of Veteran Affairs (for the well-known VA foreclosures); 3) local agencies of taxation;
4) the Federal Deposit Insurance Corporation (FDIC – the department dealing with foreclosure sales);
5) the Internal Revenue Service (IRS – once again the segment dealing with foreclosures).
However, the market of government foreclosures is led by HUD foreclosures and VA foreclosures.

In any case, the point is that with government foreclosures one of the above mentioned government agencies is holder of the property’s title. As a rule, they will place any foreclosed property at auction. The buyer’s advantages are basically drawn from bidding opportunities generated by auction circumstances: the potential buyer’s chance to set a limit for the house value, the certainty over the time interval spent to acquire a property, the possibility to evade prolonged negotiations with the former homeowner. As with any auction, government foreclosures are purchased if the bidder’s offer is appropriate. Also, your involvement in government foreclosures auctions needs to be mediated by a certified real estate agent who is regularly rewarded a 6% bonus for having successfully sold the property. The real estate agent’s indemnity is an additional figure to the sum you place as a bid.

To what concerns bank foreclosures, there are three major ways of purchasing such properties. One of them is in pre-foreclosures. In this case, you will need to act promptly, because there is actually very little time up until a property in a pre-foreclosed stage is transferred to foreclosure terms. So before properties actually become bank foreclosures, the active, smart homebuyer/investor – who has previously undergone a serious investigation of an area’s real estate market – will know to move in the direction of negotiating directly with the distressed homeowners. If pre-foreclosure attempts fail, the next step is an auction.

With bank foreclosures, the auction is required by the banks whose lends haven’t been acquitted on time. In such circumstances, the homebuyer/investor could try to overpass the bank’s bidding offers. Yes, the bank will also bid in such auctions, interested in stepping further along the process of profitably selling foreclosures. If the auction is won by the bank, the property becomes an REO (real estate owned) foreclosure property. This is the third way in which you could purchase bank foreclosures. When you are interested in REOs, you will negotiate directly with the bank. The main advantage of the potential homebuyer/home investor is that this is the most certain manner (and one of the fastest) of acquiring a foreclosed property. You will need to make an offer, but be careful: the offer should be commonsensical, don’t expect a bank to accept a discount of 50%, even if we are talking about foreclosures. Most often, you will get a 10%-20% lower price for an REO foreclosure.

In the end, the key toward purchasing foreclosures, no matter the entity selling them, is given by two stages:
careful real estate market investigation and promptness in action when the time comes to place your offer.
Remember that the market of foreclosures, no matter how advantageous, is highly competitive, since many homebuyers/investors are interested in it.

About the author: The above Real Estate information on Buying Government Foreclosures or Bank Foreclosures: Basics was provided by William Henderson, a Florida Licensed Real Estate Agent with over 15 years in the Banking, Finance and Real Estate related fields. William can be reached by email at whenderson586@gmail.com or by phone at 786-346-5611. You can also check the website http://www.foreclosuredump.com for up to date properties for sale in your area.

 

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07.14.10 By Credit.com Staff

In an effort to find more affordable home prices, more Americans turned toward foreclosures during the first quarter of 2010, according to a new report. The study - conducted by foreclosure listing and information website Foreclosure Deals - reveals that 31 percent of home sales during the first three months of the year were for homes whose previous owners defaulted on their mortgage loans.

The total number of foreclosure home sales during the first quarter is 33 percent lower than those sold during the first three months of 2009. A combined total of 232,950 foreclosed homes were sold in January, February and March. Lower sales prices are one of prime reasons consumers turn toward a foreclosure, with the average price being 27 percent lower than a traditional home during the first quarter of 2010.

"Buyers are attracted to foreclosures because they offer tremendous discounts," Foreclosure Deals business analyst James Foxx said. "The numbers show that each year, the total number of foreclosures sold has increased, and that's not just a reflection of supply. They're very popular, and for good reason, there's no better investment value in real estate currently out there."

Statistics reveal that foreclosure home sales have increased by 320 percent overall since 2007.

Many lenders, such as Fannie Mae, have implemented programs and created help centers to assist borrowers and try to reduce the incidence of foreclosure. But as unemployment rates remain high and the backlog in repossessing foreclosed properties may be skewing the real amount of Americans who have defaulted on their mortgage, it is unlikely that recovery will come as quickly as many individuals hope.

true/slant.com
author Megan Cottrell

As the $8,000 home buyer tax credit dried up, so did housing sales. The number of people buying a new house dipped to the lowest levels in recorded history after tax credit ended in May, causing many people to worry that the recession will be shaped like a W – a perilous double dip.

What’s the cure for the ailing housing market? One real estate analyst says the answer is counter-intuitive: more foreclosures.

Why? Well, analyst Mark Hanson says foreclosures are what people want to buy. The new home buyers out there want (and perhaps can only afford) a good deal. But lately, pressures on banks to halt foreclosures have curbed the supply of cheap houses. Because we’re in a market where people are iffy about taking a big risk, unless the carrot is big and juicy enough, people aren’t going to bite.

Plus, Hanson says, there’s still a huge shadow market out there – homes where the mortgage isn’t in good standing, but they’re not in foreclosure yet. Hanson says we’ve got to clear through all this bad inventory – both the homes in foreclosure now and the ones yet to be – if we want the market to turn around.

The way he explains it sounds sort of like an old rusty faucet – you’ve got to let the water run orange for awhile before it starts to come out clear.

At our current pace of foreclosure, he says, it will take 101 months to clear through the system – 8 years. But if we doubled our rate of foreclosure to 180,000 a month, he says it till take 42 months, or about 3 and a half years.

Housing activists all over the nation are putting pressure on banks to slow the rate of foreclosure. It’s hard to argue with. Who wants to put more people out of their homes?

But then again, Hanson could be right. If the entire economy is spooked by low housing sales, it means less jobs being created, fewer people spending money. Many of those who are dreading a foreclosure can’t pay their mortgage because they can’t find a job or find one that will pay a decent wage.

Is it better to be without a house in the short term paired with a quicker recovery? Or if Hanson’s right, are we just dragging out the inevitable?