Foreclosures in Denver

Foreclosure is not a word that any of us desires to even hear, let alone think about the progress happening to us. In Denver real estate, foreclosure is the legal proceeding where a borrower of the home has stopped making payments to the lender for the loan on the home and the property is taken back by the lender. The point of the foreclosure is now the bank now has a chance to take ownership or sell/offload the property and recuperate some if not all of the losses incurred by lending to a non paying borrower. The foreclosure method differs from state to state. In Denver real estate, foreclosure homes are homes that have been taken back by the bank and are now for sale by the bank. Throughout the foreclosure process there are many ways the bank can off-load a property.

There are always short sales. These are houses that are still ‘owned’ by the borrower even though the borrower has stopped making payments to the bank. The bank has approved to help the borrower sell the property before in goes into foreclosure. In the majority of cases this will save the bank money. Throughout the long process of taking a property into foreclosure the bank spends a lot of money. Once the house sells a few things might happen; the borrower is excused for losses from selling the home, or the bank makes the borrower to incur some or all of the losses. A lot of people think that getting rid of a home through short sale is healthier on their credit than a full foreclosure, I must disagree. In my opinion, lenders see a short sale on your credit and robotically view it as a foreclosure.

Denver real estate auctions occur every week. Under the right conditions a house hunter can buy properties pennies on the dollar. You see the late night infomercials preaching that you can purchase a home for a couple thousand dollars, well; I believe that particular home is probably worth…a couple thousand dollars. I hardly see these types of deals in Denver real estate but that doesn’t mean they don’t exist. They are most likely homes that never hit the MLS. Call your city and find out when these auctions happen. It’s a great starting position for investors.

Foreclosures / bank owned homes increased from a year earlier in all but 10 states. Being an agent in the Denver real estate market I am surprised how many bank properties are currently on the market. In years past I would show possibly 1 or 2 of these for every 10 homes shown. Now I can count on showing 6-7 for every 10 showings. It’s quite ludicrous. And from what I hear there are plenty more coming on the market.

The bona fide problems for agents in the Denver real estate market are the short sales. Let me rephrase that, the bona fide problems for agents in the Denver real estate market are the shorts sales that have not been pre-negotiated. A listing agent lists a short sale house and doesn’t even know the bottom dollar price the bank will accept. They wait until they have a tried and true offer in hand and then get it submitted to the bank. This is the first time the bank has put any consideration into what they really want out of selling the property and in more cases than not it takes them months and months to make a simple decision. By that time, dozens of other homes that fit the buyer’s needs come and go so when the bank finally gets back to them the answer is that the bank wants thousands of dollars more than what the listing agent had it listed for in the first place.

In wrapping up, as a Realtor in the Denver real estate market, if the house is yet to go into foreclosure and property is being listed as a short sale but has not been pre-negotiated with the bank I say let it go into foreclosure! It’s much easier and less stressful on the buyer….let alone the Realtor.