What is a foreclosure anyway? A foreclosure can be a couple of different things to a couple of different people. So let's talk about that.

What a foreclosure means in the real estate industry is a house that is owned by the bank. It was owned by a normal person. That person stopped paying their mortgage. The bank said, “Please pay your mortgage.” That person didn't pay their mortgage again and then the bank took it over and now the bank owns the property. When the bank owns the property, that's called an REO which is “real estate owned.” That doesn't make any more sense. I understand that. I mean, what are you going to do?

So, we get asked all the time. “I want foreclosures.” Well, here's the thing, there's really not that many foreclosures out there because the economy is not that bad. People are not losing their jobs and they have to give it back to the bank and then the bank just tries to sell it and there's a hole in the wall and buyers then think that they can get it for a much lower price and normally they can, except banks are tricky and not that bright because banks want the most money that they can get for the house.

So they usually start too high. So, buyers think that, “Oh, I'm going to lowball the bank. “Well, it doesn't work like that. Banks have a certain threshold that they're willing to accept. That's set from a guy in Sioux City, Iowa that's never set foot in the state where the actual asset the house is held and they say we're gonna start here and it sits on the market forever and ever. And they got to down and then it sits on the market again and another month goes by and it go down a little bit more and then maybe they'll come to reason and then sell the place. But it doesn't work in that. You can just as a buyer say, “I want to lowball the bank for this foreclosure and I'm going to be able to flip it.” Those days are past.

Number one, there's really not that many foreclosures and number two, banks don't play that game anymore. Your best bet is to try and find somebody who's in financial distress, make them a fair offer for their home and then you can get it that way. But for that, you need the services of a qualified real estate broker or some good software.

If you want to know more about foreclosures, how to get them and how many are in the market these days? Call us.