Steve Brown talks about auctions in the Dallas Morning News today. It's a good overview of the auction process but also echoes what agents have been saying for the past six months: don't expect foreclosures to be priced at 50 cents on the dollar. Why? Because the mortgage company owners have done their due diligence and know what the market value is. The list price is typically about 85% - 90% of the market value and that's the amount the mortgage company is looking for.
Auction properties, as Steve points out, most often are properties that have already been marketed for a lengthy period of time and weren't purchased. For those homebuyers or investors who don't mind major repair projects, auctions can be a good resource for a property.
What caught my attention in this article was Steve's guidelines for finding foreclosed properties:
1. Contact a local real estate agent. (I say this a lot, but I'd add, not just any agent, a Realtor, preferably a RE/MAX Realtor.)
2. Watch for auctions. You can get a list of auction sites from your Realtor.
3. Shop government listings. I routinely direct clients to the local HUD site and several clients have bought HUD properties which were very good values.
To quote Brian Buffini, "a recession is a terrible thing to waste". It certainly has directed a spotlight on foreclosures and for some buyers, it could be happy ending.
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