Mooresville Foreclosures: Relatively Limited but Alluring Options
A look at the Mooresville real estate market discloses some very interesting facts. The number of Mooresville foreclosures is just 78. These foreclosed homes are scheduled for auction in the next few weeks at the median listed price of $149,567. However, the median indicates just that – the median – and on closer scrutiny of the property choices, you will find that there are seized single-family homes with such enormously divergent listed prices as $136,103 and $1,078,000.
In addition, Mooresville has a substantially larger number of 1,480 other MLS (multi listing system) and FSBO (for sale by owner) homes, being offered at the median listed price of $348,000. Thus, it becomes obvious that the foreclosure homes seem to be selling at about half the prices as the other homes that are governed by the prevailing market prices are.
Savings at Dispossessed Owner’s Expense
The amazing discounts that the seized homes appear to enjoy need come as no surprise. The peculiar economics that enables the auctioneer to sell properties at way below their market prices and yet emerge a winner at the transaction may be discussed as follows. When a homeowner consistently defaults in paying her loan installments on time, after a due process and legally mandated period of waiting, the lender is constrained to foreclose the property. The seizing authority – be it variously the HUD, VA, Fannie Mae, Freddie Mac, Sheriff, or the dominant variety that is represented by banks – is not into real estate per se. Such REO (real estate owned) merely signify locked funds to the agency. The lender, therefore, naturally seeks to sell the property off and gain whatever liquid funds that it can.
However, different parts of the loan amounts had been paid by the owners prior to their homes’ foreclosure. So, the auctioneer is concerned with merely recovering the pending portion of the loan amount from the auction of each foreclosed house. This amount has virtually no correlation with the present market price of the property. Hence, the buyers are offered a windfall in savings at the hapless dispossessed owner’s expense. This might well illustrate one person’s bane proving to be another’s boon. The Mooresville foreclosures are offered to buyers at attractive discounts for the same reasons.