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| More rates and news from Foreclosed Properties Mean Good Deals For Investors(As the real estate market continues to slow and more and more properties end up in foreclosure, some smart investors are in for a real treat. )
Lenders and banks are going to be forced to sell these properties for deep discounts in order to make up for some of their losses and get these properties off of their hands.
A November 29, 2006 article by James R. Hagerty of The Wall Street Journal, “Distressed real-estate: price to sell,” discusses how the increasing amount of foreclosures will provide some great bargains for investors.
“As a weak housing market nudges the foreclosure rate higher, next year is looking promising for investors in distressed real estate. So far, the U.S. housing slump hasn't produced a bonanza for such investors, but lenders stuck with foreclosed property are becoming more inclined to slash prices or sell properties through auctions, industry experts say.”
These price cuts will hopefully create a lot of opportunities for investors who have been holding off on buying any property due to the stalling market.
“‘We're all going to have to be more creative in the next 12 to 24 months’ in selling foreclosed homes, says Chad Neel, president and chief operating officer of Fidelity National Asset Management Solutions, a unit of Fidelity National Information Services Inc., Jacksonville, Fla. Mr. Neel's company helps lenders manage and sell foreclosed homes.”
There are many companies around the country that work to sell foreclosed homes to investors and even regular people looking for a good bargain on a home. Many of these companies are expecting to increase their sales within the next few months.
“Williams & Williams Inc., a Tulsa-based auctioneer, says its sales of foreclosed homes will nearly double this year to about 5,060. Dean Williams, chief executive of the auction firm, expects another near doubling of sales in 2007.”
“Dallas-based Hudson & Marshall Inc. expects its auction sales of foreclosed properties to total about 4,800 this year, up 23% from 2005. David Webb, co-owner of the auction company, believes sales will rise at least 20% in 2007.”
According to these companies, there are certain areas that are more inclined to have a lot of foreclosures due to a variety of reasons.
The hottest markets for foreclosure auctions right now are the states of Michigan, Ohio, Indiana, Pennsylvania, Texas and Colorado.
Mr. Webb said that many people are predicting that California, Florida and Arizona will all become busy foreclosure markets in the next few months.
“Lenders refer to foreclosed homes as REO, short for ‘real-estate owned.’ They generally try to sell REO homes as quickly as possible to minimize holding costs, such as those for insurance, taxes and lawn care.”
“In the first half of 2006, REO properties accounted for 3.1% of all U.S. home sales, up from 2.4% two years earlier, according to a study by First American Real Estate Solutions, a unit of First American Corp., Santa Ana, Calif.”
Foreclosures were down during the housing boom because if homeowners were falling behind on their mortgage it was easy to refinance, but now with adjustable-rate mortgages resetting, it is becoming harder for homeowners to keep up. So, if you are an investor, get ready for some bargains up ahead; but if you are a homeowner falling behind, seek help now.
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