Foreclosure Harvest Is Plenty But Pickings Are Not Easy

October 1st, 2007

Today it is a buyer’s market with millions of houses slipping into foreclosure. It is the right time for those looking for profitable investment or an entry into a comfortable residence. But for this you need stamina and grit backed with ready cash.

Foreclosure numbers may be high but these are concentrated in few localities. In an auction the bids can be high. Then there is the big question mark about a property that cannot be inspected ahead. Are the copper wiring, brass taps and bathroom fixtures in place? The title too may be cloudy with money being owed to brokers, bankers and lawyers. So test the waters before wading in.

The rise in foreclosures does not automatically mean a rise in moneymaking opportunities. There is the occasional diamond in the shovel full of coal – but it needs either luck or a jeweler to spot it. It is not impossible but it is very difficult. Markets have not yet reached the bottom so that one can hope for the curve to rise again. It is still going down, down and down. So be sure that you’re trying to hold on to a falling star. It will just crash, make a hole and lose its shine.

With so many houses sitting on the shop shelves it is tempting to try one’s luck. Some have experience in real estate and development. Others join classes and seminars to get tips and hints. Some are making a get away while most are just sitting on investments.

Falling property prices is triggering off foreclosures, which leaves very little chances for refinancing. This year 355,624 houses have been foreclosed – the highest in the country since records are being maintained. The worst affected pockets of concentration are California, Florida, Illinois, Texas and New Jersey. Two to four million houses will be affected by the time the wave begins to subside.

Potential buyers get the housing details thorough banks or knowledgeable lawyers. Lenders want buyers and so they often outsource listings. To maximize profits they prefer professional dealers to those who are looking for a house to reside in. An investor sometimes gets a 50% discount on bulk buying of say 30 to 100 units. Those on MLS are not profitable. Pre-foreclosure sales are difficult to come by. All said and done – investing in properties is definitely not a part time job.