Inventory of Lender-Mediated (foreclosure) Properties in the San Diego area are continuing to steadily decline.
Lender-mediated New Listings in January 2016 decreased 20.0 percent to 473. Meanwhile Traditional New Listings decreased 4.3 percent to 3,429.
Lender-mediated Closed Sales were down 17.4 percent to 266.
Days on Market decreased 34.6 percent for Detached Foreclosure homes, 26.5 percent for attached Foreclosure homes.
Foreclosure properties tend to stay on market longer then traditional sales. Days on market for all Foreclosure properties was 55 days compared to 40 days for traditional sales. Many of buyers would think otherwise because they believe Foreclosure properties sell for deep discounts. Why they are not selling faster than traditional listings?
1. Neighborhood Stabilization Program
Many community leaders criticized lenders that they are disposing bank owned properties such low prices during the housing crisis, and hurting communities. So lenders came up with Neighborhood Stabilization Program to help neighborhoods recover. Now when lenders foreclosed on properties, they would do some repairs, update landscaping. We have listed bank owned properties with new fences, exterior paint, new carpet, new higher-end appliances to match with rest of kitchen. And we would list the property similar to traditional sale listing prices. Fannie Mae lists their properties, many times, over price because they have HomePath Program that does not need appraisal. When prices are similar, buyers tend to choose traditional listings because lenders are exempt from the TDS (Transfer Disclosure Statement).
2. First Look Program
Most of lenders introduced a “First Look Program” a nationwide initiative that restricts offers on all Lender owned properties to potential owner-occupants — rather than investors — during the first 10 to 15 days on the market. Lenders believe First Look Programs will help them make progress toward stabilizing neighborhoods and building stronger communities.
3. Auction
Some lender owner properties on market are waiting to be auctioned.
How to Buy San Diego Foreclosure Properties
Lenders generally do not accept offers if they are contingent on the sale of a buyer’s current home.
So buyers need to be able to be pre-qualified without selling their current home.
Many lender owned properties are sold “as is,” homes look to be in average-to-good condition because lenders make repairs to increase the marketability of the properties. But we still recommend Home buyers have a home inspection before buying a property. Make a list of everything that needs to be fixed, research the costs, and factor in those costs to any offer you make to ensure you could cover the costs on top of your new mortgage payment.
While lowball offers don’t behoove you because lenders are a lot less motivated to make deals happen than they were in 2008, neither does overpaying. So don’t get sucked into going over budget to win the property.
Prior to closing, home buyers should work with their agent to coordinate the date on which they may take possession of the property. Title issues may be discovered during the closing process and will need to be addressed and resolved, along with completion of all necessary paperwork to support the transaction.
Since there’s a ton of extra paperwork involved with buying a bank-owned property, make the process smoother by working with a San Diego Realtor experienced in dealing with foreclosures.
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