It is becoming increasingly more difficult for private homebuyers to purchase foreclosed houses as lenders tailor their strategies to investors in an attempt to unload real estate-owned homes, MarketWatch reports.
Public property records indicate that a majority of these REO sales occur at auction. As a result, lenders send to sell these homes at the fist opportunity they get. Since purchasing a foreclosure at auction tends to require a payment of cash in full, this automatically disqualifies a number of private buyers from qualification.
"Anecdotally, we're hearing from investors that the lenders are more aggressively pricing the opening bid at the auction to attract more bidders," RealtyTrac vice president Daren Blomquist told the news source.
Meanwhile, real estate records show that REO sales decreased 12 percent during the final quarter of 2011 on an annual basis, as the distressed property inventory thinned 37 percent from its peak in September 2008.
As lenders work to get through their deep backlogs of distressed homes, these are both positive indicators, as REO properties are a major factor hindering home prices and holding the market back from making a faster recovery.