A California real estate brokerage company has added a new feature that allows consumers to view bank-owned foreclosure properties that are currently on the market.
CataList Homes today announced the launch of the bank-owned property-search feature for California and will roll out the same feature for Northern California within a few days, said CataList co-founder Michael Davin.
The company obtained the data for bank-owned properties, also known as REO properties, from real estate research firm DataQuick Information Systems and cross-references that information with for-sale properties in multiple listing services.
REO properties, which are bought back by banks through an auction process and then listed for sale through a contract with real estate agents and brokers, are not always specifically identified in MLSs, Davin said.
While there are other categories of foreclosure properties, such as preforeclosure properties and properties available for sale through an auction, Davin said that transactions for those types of properties are often complex and are not ideal for the average consumer, while sales of bank-owned properties are handled more like a typical real estate transaction from a consumer’s standpoint.
To access the REO search tool, consumers can click a “Show Only: Foreclosures” field on the map-search page at the site. Users can then view a text list and mapped icons representing the REO properties. Searches can be limited further to single-family homes or to condos and townhomes. Registered users at the site can specify whether to search among available, contingent, pending or recently sold homes.
Davin said one goal of the new site feature is to dispel myths and misconceptions about the foreclosure market, which he said has been drawing a lot of attention from the media and politicians.
“There are so many people jumping on this foreclosure bandwagon and so much misinformation being spread and so much fear being spread,” he said. “All I hear is, ‘Foreclosures are up 500 percent — everybody run for the hills.'” While foreclosures are a problem, Davin said he believes their numbers are exaggerated. “I’m not saying there are not going to be more — clearly this credit-tightening will cause more foreclosures to happen. There just are not that many as a percentage of the market.
“I think the foreclosure data is being overstated, which could have the impact of causing Washington to overreact to the situation — which will further impact the real estate industry as a whole.”
Consumers do appear to be hungry for foreclosure data, Davin said, and the large amount of traffic to foreclosure data provider RealtyTrac.com‘s site is proof. RealtyTrac was rated as the second-most-visited real estate site on the Internet in July by Hitwise, with a 3.69 percent market share of unique visitors to that category.
Davin said he believes that the most useful foreclosure data for consumers relates to REO properties, as properties in other stages of foreclosure may be riskier and are not necessarily a good deal. “The idea that the public can just buy a house for 50 percent off, that’s not true,” he said.
Data that CataList collects on REO properties vs. other MLS-listed properties may be helpful in showing how aggressively the REO properties are priced, for example, and in identifying the market share of REO properties for sale and sold in a given area.
Some banks may not appreciate that CataList is calling attention to their REO listings, he said, as they may not be actively advertising those homes to the public as REO properties.
“I think you’ll find some banks that will maybe not be thrilled that we’re calling out bank-owned MLS properties. If I was a bank I would fully flag my listing as bank-owned,” he said, as consumers may be drawn to those properties. “We’re dumping a whole lot of buyer traffic on their lap. For consumers I think this is phenomenal.”
Lenders do often maintain their own Web sites for advertising REO properties, Davin noted, though it can be cumbersome for consumers to search through dozens of Web sites to identify all of the available REO properties for sale in a given market area.
Davin said he expects that other real estate Web sites will follow suit with the release of foreclosure-search tools.
