Hunting for a foreclosure?
Despite a swell in filings, searching the Net for deals isn't easy
Foreclosure filings have exploded across the country, so you'd think it would be pretty easy to shop online for some possible bargains.
Actually, this is one corner of the real estate world that seems immune to the kind of handy consolidation of listings that has made house hunting over the Web so easy and popular.
There are subscription services that provide comprehensive listings of properties in the foreclosure process. RealtyTrac costs $49.95 a month, and Foreclosure.com $9.95 a week. Each provide partial listings free of charge, and offer short, free trials.
But within mainstream real estate brokerages, the amount of information available varies radically.
Some real estate companies and online sites have no way to single out foreclosures in a search. Instead, your best clue is properties that appear to be strangely cheap; if they're described with phrases like "as is," bank-owned, or R.E.O. (real estate owned), those are industry euphemisms for a property in or near foreclosure.
Other websites have a keyword search box where you can type in "foreclosure," but the results can be erratic from search to search, and from site to site - some may list only a few properties in neighborhoods that have been overrun by foreclosures.
ZipRealty will highlight foreclosures. Other sites, such as Redfin, Trulia, and Zillow, do make it possible to search only for foreclosed properties. Redfin's results, for example, can be fewer than those offered by RealtyTrac and other subscription sites, and its coverage area does not include all of Massachusetts.
Trulia, meanwhile offers listings from RealtyTrac, and Zillow has a similar arrangement with Foreclosure.com, but both require you to sign up for a trial to receive more specific information, such as the property address.
One of the main reasons why foreclosures have eluded easy consolidation is that the main database that is the source of most online searches, the Multiple Listing Service, does not yet have a way for users to search specifically for foreclosures. Property information on MLS is entered by the listing broker.
Kathy Condon, the chief executive for the MLS Property Information Network, which compiles listings for much of Massachusetts, said its brokers "haven't asked for separate foreclosure list ings."
The company has, however, started giving agents entering properties into the system the option of identifying them as bank-owned. Moreover, MLS listings do sometimes have more information on a property than a subscription service that relies on public records for housing details.
Another big problem is that sometimes the listing does not cite a local real estate broker as a contact for the property, but rather the lender or mortgage servicing firm that seized the home from the prior owner. Good luck finding the right contact there. Many of these companies are units of large national financial firms, and the little corner of their Web presence that holds foreclosed properties for sale can be nearly impossible to find. Redfin makes it a little easier to search for foreclosures.
The company's data department goes through MLS to identify bank-owned properties and displays the listings in searches. Alex Coon, a Boston Redfin agent, said the company wants to be able to identify foreclosure listings not just for buyers interested in these properties, but also for other home shoppers as well.
"If I'm buying a house, I want to know if there's a foreclosure two doors down," he said. Still, even Redfin or the online sites of other local real estate brokerages cannot control the underlying information they get from other listing services. For example, a listing on Redfin for single-family home in Jamaica Plain turned out to be a vacant lot.
And while subscription services, such as RealtyTrac, often have the most abundant listings, they present their own trials. The listing information often consists of bare-bones information gleaned from public records, and, if you're lucky, a blurry exterior photo or two.
The listing agent identified on RealtyTrac for three bank-owned properties in Boston disclosed in an interview that all three were not yet available for showing. The local agent, Christ Stamatos, of Pondside Realty in Jamaica Plain, explained that even after a property is foreclosed on, it can take many months before the lending company can get it appraised, and then hire a local agent to sell it.
"Just picking a broker can take a long time. He has to make sure the property is secured and re-keyed," said Stamatos, who works for Century 21 in Jamaica Plain. "There's a lot of stuff going on back and forth with the bank."
However, for those buyers and investors willing to do their own legwork, RealtyTrac and other subscription services can be a tremendous resource because they are constantly capturing the latest properties to enter the foreclosure system.
RealtyTrac, for example, has many more listings than other sites. It recently showed 683 properties in Boston proper alone, while Redfin had 391. Moreover, RealtyTrac will divide search results among several categories, including those still in the foreclosure process, those about to be auctioned off, and those which have been taken back by the lender.
Rick Sharga, the company's senior vice president, said RealtyTrac's listings aren't typical of those a real estate agent might pen.
"Your average consumer is probably used to seeing property listings on MLS that are pretty and full of fancy words. What we're doing is getting public record data and appending any additional information we can find," he said. One of the main advantages it offers to subscribers is the chance to get a jump on a deals, often by contacting sellers, be they homeowners or banks, directly.
"It does require more work, but the trade-off is the saving potential on properties," Sharga said.
Regardless of its status in the legal system, information on a home in foreclosure is likely to remain scare. Brokers said the condition of these properties makes it difficult to talk them up; some have been trashed by their prior owners, looted of copper piping, and other valuable metals, or were generally neglected.
"An agent is less likely to do circular photo tours and sophisticated descriptions on properties where the copper plumbing has been ripped out of the floors," said broker David Brose, an agent at City Realty Group who specializes in foreclosures. Brose and other local agents expressed skepticism toward the whole enterprise of searching for foreclosed properties online, noting that Net listings are often unreliable, and that foreclosures are especially fraught with complexity.
"The difficult thing is these properties are often no longer habitable, and so many are only eligible for limited types of financing," said Brose, who does a lot of foreclosure work on behalf of mortgage giant Countrywide. "This is why when you approach foreclosures you really need to be working with a professional. Too many things can go wrong." 