Purchasing Foreclosures Becoming Less Attractive Poll Shows

December 21, 2009


According to a survey conducted by the Harris Interactive from November 5th through 9th, Americans are becoming less likely to buy a home in foreclosure.  According to the poll, it showed that 43 percent of adults were at least somewhat likely to consider purchasing a foreclosed home someday, compared to 55 percent in May.  This is somewhat surprising considering the amount of foreclosed inventory on the Chicago real estate and national markets.

However, foreclosures remain a significant opportunity for investors. According to the survey, 23 percent of all adults are at least somewhat likely to purchase a second home or investment property, and of these, 92 percent are at least somewhat likely to buy a foreclosed property.

Consumers expect to get a lot for their dollar when purchasing foreclosed homes and are willing to invest: nearly two out of three U.S. adults (65 percent) expect a discount of 30 percent or more when buying a foreclosed property.  Foreclosures remain to be a drag on real estate prices across the country as they are pulling down the entire market with as appraisers are being encouraged to use them as comparables often well below the undistressed market values neighboring transactions.

Short sales are becoming a common term in the current real estate market as homeowners and banks look to unload poor performing mortgages.  Short sales were never intended to be a mass market solution. Rather, they were relatively rare occurrences that took place when an unfortunate homeowner had a financial catastrophe — a job loss, a divorce, a medical problem — at precisely the same time his or her home lost significant value. When that happened, a loss mitigation manager at a bank would research the market, review the homeowner’s financial documents, carefully consider whether the borrower and loan in question met the criteria to justify a short sale and act accordingly.

Categories: Economy

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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