Foreclosures that don't close
John responded to my entry about making low offers with a good link showing the continuing foreclosure crisis. The seller I was facing-off with over an $80,000 difference of opinion about price was not a lender-owned or short sale property. But John’s point remains. He wrote:
Hi Rona, Have a look at the graph in the middle of this page:There's the reality of your post at the macro level. I drive past several unkept properties, likely abandoned, on my current 12 mile back road commute. When banks get serious about selling these, I think we're looking at the next leg down...
I get John’s point. Those foreclosed and unsold properties are sitting around. They are hard to buy. Frequently, they are not worth buying. At least not yet. John sees them every day on the way to work. I see them every week at work.
Last week, I also wrote on appraisal hassles. Foreclosed properties that are used as comparables are also driving down the price that lenders will cover for mortgages.
Buyer advice:
It is worth your time to keep an eye on the foreclosure stats at Redfin for towns you are looking at. You get them with the “More local stats and trends” button on the right. John is totally right that foreclosures will drive down prices. They have been and they will continue to do so. Look at other towns, too, to get a comparative view.
If you come upon a seller who is holding out for an unrealistic price, (compared to market value) walk away.
I hate to feed the bears on this site...some days I can’t help it.
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there is a TON of unlisted reo and other properties that are in default but have not been foreclosed on out there. The banks will eventually puke these up, that will lead to the next big leg down in this market. If you are in the market to buy, time is on your side like never before....
My neighbors' house was deserted (maybe a divorce?) and the house was going into forclosure, so a nice couple came along to purchase the house from the bank and after investing $6,000.00 into title 5 engineering/appraisal the bank failed to show up to the closing. It was a short sale and the bank had signed a purchase and sale earlier with the young couple. They (bank) eventually conceeded that they sold the house for ten dollars (no joke) to a group of anonymous investors. This poor young couple got shafted by the bank and this is another reason foreclosures and short sales seem to just sit there. The bank was WAMU.
Dear Andrew S,
You know how people tell you that when something sounds too good to be true, it is too good to be true?
Your sob story about the bank selling a house for 10 USD sounds too bad to be true, dear. Until you provide an address and we have a record of the sale registered with the town, I'll assume you are either lying or naive enough to pass an urban legend along.
Andrew S - I think you mean $600 ... a title V inspection and bank appraisal would be less than $1000 for sure.
This blogger might want to review your comment before posting it.
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