September 2010 : Foreclosures Sold At 26 Percent Discount

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The number of foreclosure filings rose 3 percent in September, according to foreclosure-tracking firm RealtyTrac.

It marked the 19th straight month that filings topped 300,000, and the first month in which 100,000 repossessions were logged.

Foreclosures Ease In Ohio, Illinois; Surge In Virginia

According to the National Association of Realtors®, distressed homes accounted for 34 percent of home resales in August, 2 ticks higher as compared to July.

And it’s no wonder.

The average sale price on a home in some stage of foreclosure was 26 percent lower last month than homes not in some stage of foreclosure. That’s great value — assuming you can find REO in decent condition.

Buying cheap REO is a waste if the home turns out to be a Money Pit.

The RealtyTrac report also revealed that:

• #1 foreclosure state Nevada’s foreclosure rate is 2x the next closest state, and 5 times the national average.
• The foreclosure rates in Ohio and Virginia are below the national average; In Illinois, it’s slightly above.
• Foreclosure rates dropped in 27 of 50 states in September 2010 as compared to August.

Next month, foreclosure data will be clouded because of robo-signing concerns.

Finding Foreclosure Deals Online

The 26 percent foreclosure discount can entice, but it’s also reason for caution.

It’s different to buy a bank-owned home in Cincinnati versus a “regular” home.

First, distressed properties are typically sold as-is, with defects that can render them non-mortgagable.  Then, you may have to wait up to 18 months for your closing.

But, most importantly, though, unlike most homes for sales, not all foreclosures can be found through the MLS.  Some inventory is “hidden”, or private, even. You’ll want to work with a real estate agent to get access to the additional housing stock not found online.

If you’re a DIY-type — get a head-start. These 3 sites below offer free, 7-day passes to huge foreclosure databases. After 7 days, pay to extend your membership, or quit and pay nothing.

1. RealtyTrac offers free access to foreclosure listings
2. Foreclosure.com offers free access to foreclosure listings
3. HUDForeclosed.com offers free access to foreclosure listings

7 days is usually enough time to find for what you’re looking.  After that, engage a real estate agent to go deeper, or to negotiate a sale.

Get A Pre-Approval Letter For A Foreclosure

Do your foreclosure research search and see what you like. Then, when you’re ready for your pre-approval letter, call me or send me an email for help. I’m experienced with short sales and REOs and my bank can close loans quickly.

Plus, my rates are excellent.

Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.