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How To Buy Bank-Owned Homes In A Period Of Rising Inventory

Foreclosures concentrate on 4 statesForeclosure filings rose close to 20 percent nationwide last month versus February, according to foreclosure-tracking firm RealtyTrac.com, and for the 13th straight month, total filings topped 300,000.

In addition to that wacky number, bank repossessions reached an all-time, quarterly record as well. Through the first three months of 2010, banks reclaimed more than 257,000 homes.

Nonetheless, 4 states dominated foreclosure activity nationwide.

California, Florida, Arizona and Georgia accounted for more than half of all bank repossessions AND together, the 4 states represent just 23 percent of the overall U.S. population. Talk about an un-even distribution.

The RealtyTrac report revealed some other interesting statistics, too.

  • Foreclosure activity was up in 40 out of 50 states last month
  • Bank repossessions rose 9 percent versus the same quarter last year
  • For the 13th straight quarter, Nevada topped the state foreclosure rate

Regardless of where you’re buying, foreclosures and REO’s are making a huge impact on the resale market right now.

About 1 in every 3 homes are  distressed.

There’s excellent value in foreclosures out there if you know where to look, but keep these points in mind:

  1. Buying bank-owned homes can take 120 days to close or more. Be flexible.
  2. Foreclosures aren’t always listed for sale publicly. Some inventory is privately-held.
  3. Bank-owned homes are often sold “as is”. There may be defects that render the homes mortgage-ineligible. Get with a loan officer than understands the FHA 203(k) loan.

The REO market can be different from the traditional “existing home” market so if you’re interested in buying an REO, be sure to talk with an experienced real estate agent first, and then get with a great loan officer to find out your options.