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.