The Deals and Duds of Westchester's Real Estate

Jan 29, 2009

11:16 AM

Real Estate Forecast: Foreclosure Flurries with a Chance for Profit

Between the housing bubble of the past few years bursting and the mortgage crisis, there has been a rise in the number of foreclosures across the country, and yes, even in our precious East Coast version of The O.C., Westchester County. While there was a significant drop in foreclosure actions filed in the last four months of 2008 (mainly due to reform measures signed into state law in August), there were still 2,206 foreclosure filings in Westchester in 2008, a slight increase of 1.8 percent from 2007.

Filings    Jan    Feb    Mar    Apr    May    Jun    Jul    Aug    Sep    Oct    Nov    Dec    TOTAL

2005         83        64        97         98        82       93        83      104      98      85      110        86        1083

2006        100       119      159       120      140      128      112     136      117     162     130      123       1546

2007        146       132      252       181      145       156      176     226     179     201     181      191        2166

2008        243       231      285      224      202     225      238    242      73       96        71        76       2206

FORCLOSURE FILINGS CHART FROM THE WESTCHESTER COUNTY CLERK’S OFFICE

Opportunities to purchase below market homes? Indeed. But investing in real estate foreclosures is a mysterious process, like a David Blaine stunt in the park (where the mystery is, why are so many people interested in this guy?)

Do your research to avoid the numerous pitfalls (Federal tax liens anyone?) and learn the basics like the fact that at most foreclosure sales, bidders must put 10 percent down when they win an auction, and they have to pay the rest in cash 30 days later.

Here’s foreclosure in a nutshell:

1. Borrower defaults in repayment of monthly mortgage and gets an ominous sounding Notice of Default taped on the front door (a downer somewhere between getting laid off and being stuck in quicksand).

2. Lender forecloses the mortgage loan and initiates action to confiscate the property and sell it off by public auction (aka the foreclosure process, duh!).

3. From the date of Notice of Default to the date the property is listed at a public auction (up to four months), the property is in pre-foreclosure stage. The best potential leads to locate a property at this stage may come from attorneys, accountants, and real estate agents.

4. The next stage is the actual foreclosure by public auction of the property, when any one can bid. See what is currently being auctioned off here. Auctions for Westchester County properties are held at the Westchester County Courthouse. Don’t wait until after the auction when the property becomes Real Estate Owned (REO, or basically a realtor selling bank-owned property) because the property likely won’t be as much of a bargain than it would in preforeclosure.

5. The third stage is post-foreclosure—hopefully you, the individual investor has taken control of the property. If a home is not bid for the minimum price at auction then the lender takes control via its REO department.

Below is an example of a preforeclosure County home for sale:

Sale Price: $499,900
Original Market Value: $619,000
Price/sq ft: $249.50
On Market Since: 11/5/08
Address: 753 Warren Ave, Thornwood
Style: Cape Cod
Exterior: Blue aluminum siding
4 BR, 2 full baths, 2,000 sq ft
Acres: .2
Year Built: 1949 (extensive renovation in 1997)
Taxes: $11,164
School System: Mount Pleasant (Westlake High)
Pluses: Corian counters and island, cathedral ceiling in family room, Thermopane windows, fenced backyard with patio, hot tub and awning, separate entrance to office
Minuses: aluminum siding, one-car garage only

For more info on this home, contact Marilyn Hupfeld at 914-560-6255; marilynhupfeld@pruholmes.com.

Below is an example of a preforeclosure County home that sold for 42 percent below market value:

Sale Price: $920,824
Original Market Value: $1,580,000
Price/sq ft: $306
Sell Date: 10/16/08
Address: 6 Fox Run, Armonk
Style: Ranch
Exterior: Brick, wood
3 BR, 3 full baths and 1 half baths, 3,007 sq ft
Acres: 1.9
Year Built: 1969
Taxes: $21,773
School System: Byram Hills
Pluses: wraparound deck, office with skylights
Minuses: needs lots of updating

Get started searching county foreclosure listings on these sites (all require a minimal payment of about $40 for full listing access).

GovernmentAuctionsGuide.com

ForeclosureFreeSearch.com

Realtytrac.com

Foreclosure.com

Marilyn Hupfeld a representative for Realty Trac and licensed realtor for Prudential Holmes and Kennedy of Armonk has provided information on Westchester foreclosures. The data presented from Realty Trac is believed to be accurate but not warranted due to the rapidly changing foreclosure process. All data subject to verification.