Act Now to Get a Foreclosure Deal

A study released today indicates that bargains on foreclosed properties are becoming few and far between. I can attest to this locally, as many properties are being snapped up at blinding speed--sometimes before my clients have a chance to look at them--by first-time buyers looking to cash in on very low interest rates before the December 1 deadline for the $8,000 tax credit deadline.

The high foreclosure rate during last two years caused an abundance of properties to flood the market. Prices on real estate dropped as the number of available homes kept growing. An analysis conducted by ForeclosureDataOnline.com using their database of foreclosures has found that situation is changing. Prices are rising and homes are being purchased more quickly than in recent months.

According to the analysis, the sell price for foreclosed property in many states has increased significantly in just the last month, from 3% to more than 13%.

In addition to the price increases, the database also suggests many homes are not staying on the market as long. While REO (Real Estate Owned) properties were once sitting empty on the market for months after ending up back in the hands of lenders, now they are sometimes selling in less than 24 hours.

The increased demand for these properties is driving up prices while the supply is also dwindling thanks in large part to the fed's program to slow the foreclosure rates. However, the foreclosure moratoriums that saved many homes will be lapsing in the very near future and will probably lead to a new batch of fresh foreclosure properties on the market. Just in case, investors and home buyers looking to secure a bargain need to act fast before the deals are gone.

Freddie Mac is offering a special through October 30, where they will pay up to 3.5% of the buyer's closing costs AND a 2-year home warranty in an effort to clear their inventory of foreclosures. HUD is offering a $100 down payment option for list price offers on their foreclosures if FHA financing is used. If you would like more information on either of these foreclosure incentives (for owner-occupied buyers), contact me!