Buyers looking to purchase foreclosures should still have plenty of opportunities. Only 30% of bank-owned properties are listed on the multiple listing services, says Rick Sharga, senior vice president at foreclosure listing firm RealtyTrac. He figures banks still own as many as 500,000 properties that they want to sell but haven't put on the market.
A home many not be listed because the bank is wrestling with title, repair or owner right of redemption issues. (Several states such as Michigan and Wisconsin give the previous owners the chance to buy back a home that's been foreclosed on). Banks may also be holding houses off the market because selling them now would lower prices even further. Foreclosures typically sell at a 31% discount to similar homes whose owners aren’t in distress. Listing all those homes now, Sharga says, “would have a devastating impact on inventory and pricing." ...
“Foreclosures are the heart of the real estate crisis and the key to the recovery,” says Pete Flint, co-founder and CEO of Trulia. All home sellers have to compete with the bank-owned properties on the market. As a result, “homeowners are absolutely pricing to sell,” Flint says. “Nationally, one quarter of all homes have cut their listing price at lease once in the past year.”
Friday, May 22, 2009
RealtyTrac: 500,000 REOs being held off the market