Thursday, July 06, 2006

Foreclosure Website Problems Noted

The Wall Street Journal has this report on foreclosure opportunities. "Rising interest rates and a cooling housing market are whetting the appetite of real-estate bargain hunters and fueling interest in Web sites that list homes in, or near, foreclosure. A variety of Web sites have sprung up to cater to home buyers and investors looking to purchase properties in or nearing foreclosure. You can browse the Web sites at no charge, but getting complete access requires a weekly or monthly fee, typically $40 to $50 a month."

"The federal government operates its own site,, that is free and provides information about foreclosed properties being sold by the Federal Housing Administration, the Veterans Administration and the U.S. Department of Agriculture.'

"To see how these Web sites work, we checked the government site and three for-profit alternatives. We also looked at the information each Web site provides and talked to real-estate brokers who specialize in foreclosed properties."

"We learned that novices should approach the foreclosure process, and the Web sites that sell foreclosure listings, with care. Finding a good buy on a foreclosed house requires hard work and can carry significant risks. Critics say that Web sites selling foreclosure listings often contain outdated information or listings on houses that aren't ready for sale; some try to direct would-be buyers to partners with whom they have a financial relationship or to seminars and other products."

"'We run into a lot of problems with foreclosure Web sites because a lot of the houses can't be sold' because various legal requirements haven't yet been met or the lender hasn't readied the property for sale, says David Benham, who sells foreclosed homes on behalf of lenders."

"The for-profit Web sites all talk about the large number of properties they feature. But even some companies acknowledge that some of the information they offer is out of date. 'The most common complaint is either the property is not on the market yet or the property is already gone,' says Rick Sharga, a vice president of RealtyTrac Inc."

"'If there are 1,000 properties in an area you are interested in, there are probably 100 that represent something of a buying opportunity. You might be able to get in touch with 10 of the homeowners and maybe make an offer on one or two,' he said."

"Figuring out which site has the most accurate information would require checking out hundreds of thousands of listings. But our spot check easily turned up information that was outdated. On and, for instance, we found a three-bedroom, one-bath home priced at $101,900. Ms. Simpson, the Atlanta broker, told us the house had been under contract for 30 to 45 days."


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