Tenants are joining the wave of purchase foreclosed units

In the current drooping real estate market tenants are envied – they do not have to have headaches about financing repairs to the house, dues to be paid to house owners associations or even property taxes. But the off side is that they are throwing away dollars each month without being able to build up any equity. This is one of the reasons why some of the tenants are thinking of joining the ranks of house owners by purchasing foreclosed units.

Against the background of the buyer’s market it seems a wise choice to buy a foreclosed house. But with the recent stabilizing of prices many potential buyers are not too keen in hunting for distressed properties because there are many hidden costs and fees linked with these sales. A survey conducted by RealtyTrac and Trulia.com noted that over half the respondents were not keen on buying foreclosed houses as before.

Rick Sharga of RealtyTrac said, “It’s somewhat surprising that consumers cite hidden costs as the biggest negative aspect of buying a foreclosed home. Most bank-owned foreclosure sales include the same title protections and other safeguards that are in place for non-foreclosure sales.”

With other consumers shying away from distressed units renters have revived interest in the cheaper properties that are in comparatively run-down conditions. RealtyTrac observed 57% of the tenants are more likely to purchase a foreclosure. There is more possibility of 61% of those aged 18 to 34 years to opt for foreclosed estates. Among those aged more than 55 the likelihood is about 40%.

The added plus point is that tenants would have a surfeit of foreclosures to pick and choose. In 2010 it is estimated by RealtyTrac, Trulia.com and Economy.com that there would be about 2.4 million foreclosures in 2010 – an increase from the estimate of 2 million of the previous year. Peter Flint of Trulia said, “Even during the darkest of economic times, dreams do not die. Foreclosures provide never-before-seen opportunities for new segments of homebuyers and allows renters to become first-time home buyers.”

Renters would do well to keep tabs on those states with huge foreclosure numbers – Arizona, California, Florida and Nevada. The cities of Miami, Minneapolis, Phoenix and Seattle are seeing spikes in numbers. Rick Sharga of RealtyTrac said, “Consumers [should] take the time to educate themselves on the process for purchasing foreclosures. They’ll be able to take advantage of the great bargains that currently exist in the real estate market.”

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