Recently a client sent me this email:
"The Internet shows a whole lot of houses on Vashon that are in foreclosure. I've been waiting for a chance to really make a killing in real estate and want to buy up a couple of these places for way under market value. I think I could flip them next year when the market recovers. I've included the list and I'd like your opinions of these homes."
I explained to him that there are many foreclosure websites right now. They are a rip off. Those sites just copy the records from city and county sites and charge you a premium for the information. You notice these sites are sponsored by agents and lenders looking for business.
Of the homes my client had sent me, three had already sold and foreclosure didn't happen. Two were currently in a sales transaction and the lender will be paid out of the sale. Two of the homes are owners who stay a few payments behind all of the time but always make their payments just before the home would go into foreclosure. Not exactly accurate and timely information from these sites.
In fact only two of the homes on the list appeared to actually be about to go into foreclosure. Keep in mind that the banks don't want the house, so are usually willing to work with the owners if the owners can redeem the house by paying back payments. That can happen even if the property is up for auction.
Most of the foreclosures in our area are not the result of the sub-prime problems nationwide, but rather from people who have borrowed too much on a home equity line of credit. They often owe more than the house is worth. That means they can't sell for "pennies on the dollar" since they owe so much. If the lender takes the house back, they will put it on the market for what is owed on it, in most cases. That means there aren't any "steals" out there.
However, well-priced homes that are in good condition and in good locations are still selling briskly here.