RealtyTrac Archives - George L. Duarte

Short sales rising Foreclosure-tracker RealtyTrac reports falling foreclosure sales nationwide as banks get better at selling homes via short sale.

In its Q3 2012 report, RealtyTrac says that 193,059 homes in some stage of foreclosure were sold, accounting for 19% of all residential home sales. In addition, pre-foreclosure sales — also known as “short sales” — climbed 22% on a year-over-year basis.

For the first time since 2007, the number of short sales outnumbered the number of homes sold in foreclosure over three consecutive quarters.

The average price of a short sale home fell by 5 percent as compared to a year ago which may reflect an eagerness on the part of mortgage lenders to dispose of distressed properties before they fall into foreclosure. Foreclosures can increase a lender’s losses, and foreclosed properties be expensive to manage.

Compare the average Q3 2012 sale price of a home in short sale versus one in foreclosure :

Average sale price of a residential property in short sale : $191,025
Average sale price of a residential property in foreclosure : $161,954

It’s not just the higher home sale prices that have pushing banks to settle on short sales, either. Short sales are less costly, too. Foreclosing on a home requires banks to pay court costs, among other fees, and which positions the short sale outcome as a clear winner for many banks.

For homebuyers in California , the banking industry’s shift toward short sales is welcome news.

Buying a short sale has been a notoriously slow process with a lack of defined timeline. As banks improve their distressed sales division, they’re getting faster and more efficient. This makes it “easier” for a buyer to buy a home in short sale.

However, don’t buy a short sale without the help of an experienced, licensed real estate professional.

The negotiation process is different for a short sale than with a “traditional” home purchase. Time lines are different, responsibilities are different, and purchase contract language may be different, too. The same is true for buying a foreclosure.

Foreclosures per household October 2012

According to data from RealtyTrac, a national foreclosure-tracking firm, the number of foreclosure filings increased 3 percent in October as compared to September 2012, climbing to 186,455 U.S. properties.

RealtyTrac defines a “foreclosure filing” as any foreclosure-related action including a Notice of Default, a Scheduled Auction, or a Bank Repossession. On average, 1 in every 706 U.S. homes had a foreclosure filing during the month of October.

For the 24th consecutive month, the number of bank repossessions fell, down less than 1% from the previous month and down 21% from October 2011. Bank repossessions dropped in 37 states, plus the District of Columbia, indicating that banks are seeking alternatives to foreclosure.

Distressed home sales, which include foreclosures and short sales, represented 23% of sales in the second quarter of 2012, down from 30% a year ago, according to the National Association of REALTORS®.

Florida again posted the top foreclosure rate nationwide.

One in every 312 Florida housing units had some sort of foreclosure filing in October as foreclosure starts moved to a 12-month high. Monthly filings increased 2% from last month.

In Nevada, the monthly increase was larger, rising 41% month-over-month, lifting it from the fifth-highest rate in September 2012, to the second-highest in October 2012.

Third-ranked Illinois saw a 6% increase in foreclosure filings over September 2012. California and Arizona rounded out the top five.

Hurricane Sandy made an impact on the foreclosure market, too, with a foreclosure moratorium being put into effect in the states most affected such as New Jersey, New York, and Connecticut.

For Minneapolis home buyers planning to venture into the home foreclosure market, there are well-priced homes for sale. However, understand that a foreclosure property is often sold “as is,” and that you may not be allowed into the property prior to the sale to inspect for damage. Home may have termites, been gutted by previous tenants or owners, or be filled with lead paint or asbestos.

For this reason, it’s a good idea to engage an experienced real estate professional when buying foreclosure properties. Real estate agents can guide you through the foreclosure process and give advice regarding contracts and home inspections.

Short Sales Outnumber Foreclosure Sales For Third Straight Quarter

Bank Repossessions Slip For 24th Consecutive Month

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