Foreclosed Homes for Sale at Foreclosure Auctions

Foreclosures up, home sales down

Image from Flikr.

Image from Flikr.

Despite the high number of foreclosed properties flooding the housing market right now, both banks and builders in some cases are finding it impossible to sell houses. Reuters reports: “U.S. lenders and builders are turning to professional auctioneers to help them unload the unwanted real estate in a hurry.”

Hiring a professional auctioneer to unload a property is a last resort for companies looking to unload homes, and usually it means the seller will lose money on the property.

Winners and losers

The foreclosure auctions are great news for people looking for a bargain on a home, but they are bad news for banks and builders. And a home on the auction block means someone out there has already received bad news: Your home is foreclosed. Move out.

A silver lining is that lenders have started recognizing that they could stand to lose more on the home if they foreclose than if they work things out with the current homebuyers. Many banks now are waiting for owners to go through debt consolidation or debt management instead of foreclosing homes. The Mercury News explains why:

More than 2,000 Santa Clara County homeowners received foreclosure notices from their lenders in September, but a relative few actually had their homes sold at auction.

Foreclosed homes going once, going twice…

The situation in Santa Clara is present all over the country. Reuters reports that at a recent auction in Chicago, a seven-bedroom home was put up for auction.

“Any interest in this home at $7,000?” fast-talking auctioneer Renee Jones asked the crowd. “If not, we’ll move on.”

I find it tough to believe that no one wanted to buy a seven-bedroom home in Chicago for $7,000 (could it be a typeo?) but nevertheless, foreclosed homes for sale at auctions and online are at the highest numbers in recent history.

It ain’t over till the auctioneer sings

The number of foreclosed homes for sale hasn’t topped out yet. Auctioneers are gearing up for more business, according to Reuters:

Hudson & Marshall, one of the biggest auctioneers in the market … and its rivals say they are gearing up for more in the coming months, convinced that a moratorium on foreclosures earlier this year only postponed what they believe is an inevitable avalanche of new repossessions.

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