Sun State Savings

Accord­ing to fore­clo­sure data firm Real­ty­Trac, the num­ber of fore­clo­sure fil­ings nation­wide rose 9 per­cent in May as com­pared to April 2012. Fil­ing topped 200,000 units for the first time in 3 months.

The term “fore­clo­sure filing” is a catch-all term com­pris­ing default notices, sched­uled auc­tions, and bank repossessions. On aver­age, 1 in every 639 U.S. homes receiv­ing a fore­clo­sure fil­ing in May.

As in most months, fore­clo­sure activ­ity was con­cen­trated by state. Just 6 states accounted for more than half of the nation’s total filings.

Those six states were :

1. Cal­i­for­nia : 13.6% of all repossessions
2. Florida : 11.0% of all repossessions
3. Geor­gia : 9.8% of all repossessions
4. Illi­nois : 6.6% of all repossessions
5. Michi­gan : 6.5% of all repossessions
6. Ari­zona : 6.3% of all repossessions

An inter­est­ing note, though, is that for the first time since Feb­ru­ary 2006, Geor­gia was the country’s most foreclosure-heavy state, dis­plac­ing Nevada, which has dom­i­nated the fore­clo­sure land­scape for the last 5 years.

1 in 300 Geor­gia homes received a fore­clo­sure fil­ing in May. The national aver­age last month was 1 in 639 homes.

At the other end of the fore­clo­sure spec­trum is Ver­mont. There was just 1 fore­clo­sure fil­ing for every 15,539 homes in The Green Moun­tain State last month.

Mean­while, dis­tressed homes remain in high demand with today’s home buy­ers, account­ing for 28 per­cent of April’s over­all exist­ing home sales based on data from the National Asso­ci­a­tion of REALTORS®. However, if your home pur­chase plans call for buy­ing a fore­closed or bank-owned home, make sure you do your research first.

Buy­ing bank-owned prop­erty is a dif­fer­ent process as com­pared to buy­ing a non-distressed home. The pur­chase con­tracts are dif­fer­ent, the buyer-seller nego­ti­a­tions are dif­fer­ent, and the homes are some­times sold with defects. This can make it dif­fi­cult to get a mort­gage — or even impossible.

Before buy­ing “dis­tressed”, there­fore, be sure to with a real estate agent. It’s good to have an expe­ri­enced agent on your side to coach you through the process.

Accord­ing to foreclosure-tracking firm Real­ty­Trac, fore­clo­sure fil­ings fell to 199,000 in March 2012, a 17 per­cent decrease from March 2011. Last month marks the first time since July 2007 that fore­clo­sure fil­ings num­bered less than 200,000 on a monthly basis — a span of nearly 5 years.

The generic term “fore­clo­sure fil­ing” is used to group all types of fore­clo­sure activ­ity into a sin­gle read­ing. It includes default notices, sched­uled auc­tions, and bank repossessions. 

As in most months, fore­clo­sure den­sity var­ied by region. 6 states accounted for more than half of the nation’s repos­sessed homes in March.

• Florida : 13.6 per­cent of all bank repossessions
• Cal­i­for­nia : 12.0 per­cent of all bank repossessions
• Geor­gia : 8.0 per­cent of all bank repossessions
• Michi­gan : 7.5 per­cent of all bank repossessions
• Ari­zona : 6.5 per­cent of all bank repossessions
• Illi­nois : 6.4 per­cent of all bank repossessions

At the other end of the spec­trum, North Dakota and Wash­ing­ton, D.C. were home to the fewest bank repos­ses­sions, with 0.03% and 0.02% of the national total, respectively.

Also note­wor­thy is that the Real­ty­Trac report revealed that Nevada relin­quished its title as Top Fore­clo­sure State after 62 con­sec­u­tive top-ranking months. In March, 1 in every 301 Nevada homes received some form of a fore­clo­sure fil­ing. The March rate was a nation-topping 1 in 300 in neigh­bor­ing Arizona.

For home buy­ers, today’s fore­clo­sure mar­ket rep­re­sents an inter­est­ing opportunity. 

Homes pur­chased while in the var­i­ous stages of fore­clo­sure can often be bought at lower prices rel­a­tive to homes not in fore­clo­sure. It’s one of the rea­sons why fore­closed homes now account for 20 per­cent of all home resales. 

How­ever, don’t con­fuse less expen­sive for less costly.

Fore­closed homes are often sold “as-is” and may be in var­i­ous stages of disrepair. Fixing a fore­closed home to make it hab­it­able could wipe out the money saved on its price tag. Your best real estate “deal”, there­fore, may be a non–dis­tressed home in sound, move-in ready condition.

If you’re buy­ing fore­clo­sures — or even con­sid­er­ing it — be sure to talk with a real estate agent first. The process of buy­ing a fore­closed prop­erty is dif­fer­ent from buy­ing a “reg­u­lar” home. You’ll want some­body expe­ri­enced on your team.