Bus Loads Of Buyers Scan House Foreclosure Bargains

November 20th, 2007

More than 850 houses in Santa Barbara and San Luis Obispo Counties are sitting on the pre-foreclosure stage. 260 houses are bracketed for auction sales. There are 760 houses, which are on REO, or bank owned sales list. The potential buyers came on a tourist bus to see some of the bank-owned units after taking advice from experts. Many feel this is the opportune time to invest in a house on the Central Coast region.

On Saturday, Dick Keenan, a real estate agent took around 30 would-be buyers on a conducted tour of foreclosed houses. In the case of bank-owned properties there is no question of hurting sentiments and playing with emotion. The talk is strictly confined to dollars and cents. The foreclosure is a legal process that includes many steps. In the first stage the borrower defaults on making consecutive payments and becomes delinquent. The lender or the trustee then issues a foreclosure notice. A date is set for auction within which time the borrower is given time to clear the dues or come to some sort of an understanding with the lender. If the unit is sold off at the auction then the lender gets back the loaned amount and taxes together with other dues are cleared. If unsold the property then reverts to the bank and becomes REO. The buyer of an REO is not burdened with any dues and moreover gets a chance to inspect these vacant units. One has not come across such a buying opportunity since the last decade. Then the housing climate was hot but now it is cold and half dead. Houses are just not moving as before says Brian Henninger of Paso Robles who signed up for these tours to see for himself the offers.

Keenan says the banks are making extremely low offers. They cannot afford to sit on idle properties. It makes one cautious and speculate that perhaps the market is going to further slide. It is a buyer’s market while sellers are crying themselves hoarse for someone to take their wares.

Foreclosures are continuing unabated. California reported one house foreclosure for every 88 houses. Nationwide the activity in foreclosures doubled from what it was in the previous year. Mortgage companies are getting ready for more reports of default as the interest rate on sub-prime mortgages gets ready for another spurt of rising.