RealtyTrac Adds Net Equity/LTV & Loan Position
Two exciting new pieces of information on RealtyTrac not only make it easier for buyers and investors to spot the best foreclosure deals, they also help to avoid costly surprises when it comes to buying a foreclosure. So really it's four wishes granted, but three sounds better and who is really counting? So let's move on to the meat of these new features.
First, RealtyTrac has added estimated equity -- or negative equity -- to properties in default or scheduled for auction (the equity doesn't apply to bank-owned REO properties because by definition those properties are owned by the bank free and clear). RealtyTrac users can sort search results by the amount of equity and even set up a search filter to only return properties within a certain range The equity is calculated by starting with the estimated market value of the property and then subtracting any outstanding loans on the property. Which gets us to the second feature: a simple list of all outstanding loans on each property, along with the position of those loans.
So how does this help buyers and investors? The equity information and search filter helps to more quickly identify properties that may be of interest. Some buyers and investors may be only interested in foreclosures with equity so they can go in quickly and create a win-win situation for them and the seller: both are able to profit from a sale of a property padded with equity. On the other hand, properties with negative equity can also represent good deals if the lender is willing to accept a short sale -- and many lenders are in today's market.
But -- to borrow from every infomercial worth its salt -- there's more: the new list of outstanding loans and loan positions gives buyers and investors the heads up about second or even third loans that might further complicate a short sale or cause them to buy an encumbered property at the public foreclosure auction.
Here's a video showing how these new features work.