To Find The Best Foreclosures, You Have To Know Where To Look

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Foreclosure activity is slowing nationwide. At least for now.

Fewer REO Means “Deals” For Buyers

According to RealtyTrac, foreclosure filings dropped 17 percent nationwide on an annual basis last month.

“Foreclosure filing” is a catch-all term comprising default notices, scheduled auctions, and bank repossessions.

January’s filings stayed sub-300,000 for the third straight month. This is relevant because, before 3 months ago, filings had topped 300,000 per month dating back 20 months; all the way to March 2009.

Filings are lower by one-fifth overall today.

Furthermore, an important subset of foreclosing filings — bank repossessions — are falling, too. Bank repossessions are the homes that are eventually sold to everyday home buyers so as repossessions drop, so, too, does the national foreclosure inventory.

Foreclosures Concentrate In 5 States

Like most things in real estate, foreclosures are local. What’s true in the national data doesn’t necessarily apply here at home.

January’s foreclosure data illustrates that plainly. 5 states accounted for more than half of nation’s bank repossessions.

• California : 20.3 percent of foreclosures
• Florida : 9.7 percent of foreclosures
• Arizona : 8.6 percent of foreclosures
• Texas : 6.4 percent of foreclosures
• Georgia : 6.1 percent of foreclosures

Together, these states represent just 31 percent of the population.

However, we can’t read into January’s foreclosure data too much; ultimately, history may treat it with an asterisk. Controversy surrounding the so-called “robo-signers” forced some of the biggest banks to put a temporary halt to foreclosures around the end of the year and results may be skewed somewhat.

February and March data may paint a clearer picture.

Report : Foreclosures Sell At A 15% Discount

According to the National Association of REALTORS®, distressed properties accounted for 36% of existing home sales in December. Distressed homes typically sold at a 15 percent discount as compared to non-distressed homes.

There’s good buys out there, but because of falling REO, it’s going be harder to find them. The trick is to search the databases that other buyers aren’t. There’s plenty of free ones available online, thankfully.

Each of 3 sites, for example, give all-access, 7-day foreclosure database access for free. 7 days should plenty of time to scope the market. Then, if you want to extend your membership to the paid version, you can do it.

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

Once you’ve found a home, or at least narrowed it down, call your real estate agent to help with negotiations. Buying a foreclosure is different from buying a “traditional” home. You’ll want somebody experienced to help you with the negotiations. Otherwise, the banks may work you over a bit.

Get A Foreclosure-Specific Pre-Approval Letter

Once you’ve done your foreclosure research, call or to request a foreclosure-specific pre-approval letter. I’m experienced with short sales and REOs and my bank can close loans quickly for you.

I finance homes for investors with more than 4 mortgages, as well.