Nationwide, about one-third of sales in May were of
distressed properties. A big chunk of those sales went
to first-time buyers, according to Lawrence Yun, chief
economist for the National Association of Realtors.
"First-time buyers are concentrated
in the lower price ranges, which include most of the
distressed sales," Yun says.
Before you begin the house hunt The first two steps in
buying a foreclosure should happen almost
simultaneously: Find a real
estate broker who works directly with banks that own
foreclosed homes and get a preapproval from a lender.
Buying a foreclosed home is a little different from
buying a
typical resale. The seller wants a preapproval
letter from a
lender before accepting an offer. There often is little,
if any,
room for negotiation. The home comes as is, and it's up
to the buyer to pay for repairs. Fannie Mae will
usually include
closing costs. On the upside, most bank-owned
homes are vacant, which can speed up the process of
moving in.
"Buying a foreclosure is definitely a bit of a grind.
It's not easy," says Paul Teasdale, owner and founder of
the Team Teasdale Realty in Utah County. "You're getting
fantastic pricing, but sometimes it takes going through
a lot of houses and writing
a lot of offers to get the home you want."
In Utah County, the housing bust hit hard, and upward of
50 percent of homes sold are "distressed properties" --
foreclosures and short sales. (A short sale happens when
the lender agrees
to let the owner sell the house for less than the amount
owed because the owner can't afford the monthly
payments.)