Kona Kohala Blog

There is much interest in foreclosure property these days but much of that interest is based on incorrect information.  It seems there are those who believe foreclosure property is everywhere and selling for just pennies on the dollar.

While it's true there is steady stream of foreclosures coming on the market these days there aren't as many as some think and they are seldom as inexpensive as some think.

Typically what happens at a foreclosure sale here is the property is put up for sale by the commissioner, an attorney hired by the lender to auction off the property at a public sale.  In almost all cases, the first bid is made by the lenders representative who's there to take the property back if not enough money is offered.  That first bid is usually around what is owed.  Because of the current market, most properties going into foreclosure are there because more is owed than what the property is worth.  If it were the other way around, the owner could sell and walk away with a profit.

So what happens at most auctions is that the lender buys back the property then turns it over to a broker who will then attempt to sell it for whatever they can get so the bank loses as little as possible.  These foreclosed properties become REO's, Real Estate Owned bank property.  Below is a list of foreclosure properties currently in MLS.

If you would like a list of foreclosed or REO properties or those being sold as Short Sales, email me and I'll get it over to you.  If you'd like to be on the Aloha Friday weekly newsletter list, email Robert@FerrariPacificRealty.com and I'll put you on the list.  aloha