Want to Buy a Foreclosed Home? Try Google Maps or Zillow

Photo: Google Helps Find Foreclosures: Google Maps helps home buyers spot foreclosure sales.PlayGoogle
WATCH Google Helps Find Foreclosures

With mortgage rates at their highest level in six months, the number of mortgages rising though still near record lows -- Freddie Mac reported that the rate for a 30-year fixed rate mortgage averaged 4.61 percent last week -- this may be an opportune time for buyers.

Real estate websites are offering better tools to research foreclosed homes for sale, sometimes at a steep discount. Earlier this month, RealtyTrac announced that in the third quarter of this year, the average sales price of properties sold in some stage of foreclosure was over 32 percent below the average sales price of properties not in foreclosure.

Google Maps began offering a search feature last year for foreclosed properties. It is growing in popularity, though it is not very novel, said Justin McHood of MortgageCommentator.com

"They haven't done a very good job of differentiating themselves from people who do it better," McHood told ABC News.

McHood, who writes about mortgage topics for Zillow.com, one of the largest real estate websites, said a number of sites are simply rehashing what is known as "multiple listing services," regional listings of properties for sale.

RealtyTrac.com is a real estate website that specializes in foreclosed properties, with over 2 million listings, according to senior vice president Rick Sharga. Although all foreclosed properties are listed in public records, he estimates that less than 6 percent of public foreclosure databases are online. Sharga said RealtyTrac.com fills that gap by hiring contract employees to hand collect those records in court houses in 2,200 counties nationwide.

Sharga said RealtyTrac.com, which offers free and paid-for information, has foreclosure-specific information that other sites may not have, including data about multiple loans on a foreclosed home. Sharga said this is important because of short sales, in which a lender takes less than what is owed on the property.

"The more loans, the less successful a short sale would be," said Sharga. "You then have two banks to negotiate with."

Fannie Mae launched a website in June, HomePath.com, which lists the properties it owns. HomePath.com gets 15 to 19 million hits per month and generates about 800 leads a day to listing brokers, according to Janis Smith, a spokeswoman for Fannie Mae.

More than 87,000 families purchased HomePath properties in the first half of 2010, according to Terry Edwards, executive vice president, Credit Portfolio Management at Fannie Mae.

Amy Bohutinsky, vice president of marketing at Zillow.com, said her site distinguishes itself from others by offering a free online marketplace not just for those interested in buying and selling. The site has data about over 100 million homes in the U.S. for the curious who want to check the website for the estimated value, or "Zestimate," of their homes.

Bohutinsky said those who want to, say, refinance or remodel a kitchen can compare their Zestimate with data from 12 years ago.

Last month Zillow.com had 12.5 million visitors, up 60 percent from last year, according to Bohutinsky. Despite the "biggest real estate downturn of our lifetime," she said Zillow.com is growing, as is the number of other real estate websites.

"People continue to shift many of their daily activities online, which accounts for the growth in the online real estate category," said Bohutinsky. "What accounts for Zillow's growth is we appeal to a wide spectrum of people with any interest in homes. It's somewhat insulated against wild swings in real estate transactions."

Bohutinsky cautions that with the large number of foreclosed homes on the market, research through any of these websites requires caution.

"Often you can get a discount, but often a lot more work to fix up or sold as is," said Bohutinsky. "A foreclosed home is abandoned because owners walked away or a bank has kicked them out. So you obviously have to have a stomach for that. It's important to have a realtor who specializes in foreclosures."

Brian Lewis, an executive vice president of Halstead Property, said that while these websites offer invaluable information, none replaces the services of licensed real estate professionals.

"The Internet is good with presentation; I'm good with deep, contextual information," said Lewis. "Without a professional to offer you context in that information, you can be misguided."