Wednesday, May 26, 2010

Consumers shy from foreclosure bargains due to risks

Flunking credit scores
Buying a foreclosure property provides an opportunity for dramatic savings on a home, but the time and effort involved in executing, bidding against others, and the need to do renovations may be issues for buyers.

by Broderick Perkins
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Deadline Newsroom - Many home buyers expect big bargains from foreclosures, but because they believe certain risks outweigh the potential savings, a growing number of them are shying away from the deals.

And there's a further disconnect -- despite that growing reluctance to buy foreclosures, some experts expect foreclosure sales to increase.

"Buying a foreclosure property still provides an opportunity for dramatic savings on a home, but the time and effort involved in executing a short sale, bidding against other buyers for a bank owned property, or the need to do renovations may be issues for buyers," said Rick Sharga, senior vice president for RealtyTrac.

Ninety-five percent of surveyed U.S. adults age 18 and above generally expect to pay less for a foreclosed home than they would for a similar property for sale that is not a foreclosure, according to a recently released Harris Interactive survey commissioned by real estate information and search engine and online foreclosure marketplace,

However, fewer home buyers say they are actually digging for gold in the distressed housing sector. The survey found that only 45 percent of U.S. adults age 18 and above are at least somewhat likely to consider purchasing a foreclosed home in the future. That's down from 55 percent last year at this time.

You've got news!...News that really his home! Here: "Homebuyers Wary of Taking on Foreclosed Properties"

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

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1 comment:

Maria Hars said...

Buying properties at a foreclosure sale is tricky because you are not allowed to go inside the house before you bid. Also one must do due diligence. Most properties have many liens on them which need to be paid in full and released.

Research is key. Know the market and the location, have a market analysis done to make sure the property has value. Go to the town hall and talk to the building inspector, planning board, board of health, conservation if near wetlands. People love to talk. Talk to neighbors about the property.
Do a title rundown last 50 years to make sure there are no liens or cloud on title.
Homework is key and know your strategy.