Foreclosures

Gary North

May 5, 2008

I plan to buy a few investment houses between now and late 2010. There will be panic in the housing markets by 2010. The sellers' illusion that this down market is temporary will be over. They will be forced to sell. It will be a buyer's market. I like buyers' markets.

I want to get a sense of what the market is today in a town I am considering a move to. So, I signed up with a home foreclosure website to find out what prices are these days.

A lot of homes are being foreclosed. That's the bottom end of the market -- the best deals per square foot, though not necessarily the best neighborhoods. These homes often get auctioned. I want to see if the foreclosing lenders are actually selling their homes at the minimum bids, or are they faced with a no-bid situation. A no-bid situation makes lenders far more willing to negotiate after the auction is over -- if not in the month of the auction, then after a couple of months of empty houses, where vandals, weather, or crackheads may erode equity.

I signed up for a free 7-day trial with RealtyTrac. It is highly rated by this site, which I trust.

http://GaryNorth.com/snip/551.htm

You pay $50/month for the RealtyTrasc site, which is a bargain if you are actively searching for a foreclosed properties. But all I want is an introduction to a specific zip code.

There will be an auction on the courthouse steps next week. My wife will be there to see what houses sell for. Then she can visit the sold and unsold (no bid) houses. RealtyTrac provides comprehensive information on all of them: square footage, year built, when they came on the market, etc.

I will cancel my membership after six days. But I will probably re-join late next year, when I am actively searching for investment opportunities.

Note: If you follow this plan, you may get a call from them offering a discount price on a subscription.