When you buy a property from an online foreclosure auction, the auctioneer gives you time to research the properties, including time to physically inspect the properties, although all these activities have schedules and time frames.

In a foreclosure auction conducted in a building where bidders are physically present, participants are also given time to inspect the properties, although in most cases, properties auctioned off by courts can only be inspected from outside.

Both online and conventional foreclosure auctions sell properties on an as-is basis. Some auctioneers also ask buyers to sign waivers of the ten-day post-auction inspection period described under Title X, which gives winning bidders the right to inspect the house for lead-based paint.

In most cases, companies holding both types of foreclosure auctions also provide information on the foreclosure properties to be auctioned off on their web sites. But companies holding purely online foreclosure auctions provide more detailed information and more photographs as they are targeting buyers that rely mostly on information available online. Prospective buyers can look at a lot of properties online before choosing certain properties that they like to inspect physically.

What sets the two ways of buying foreclosure auction properties apart is the bidding environment. When bidding online, you are in the privacy of your home or your office, allowing you to focus on your notes and on the process of bidding without the grumblings, mutterings and tension common in a conventional auction.

In a conventional auction, there is also the risk that you can get hyped up by the intensity of the bidding that you lose sight of the fact that you are already bidding more than the real value of the foreclosed property.

When considering bidding online, check the reputation of the auctioning company. Avoid participating in newly launched auction firms that have not shown concrete proofs of their intentions in the real estate sector.

Remember that you are giving your credit card number for verification and deposit purposes, so you should only trust companies that have been successful in the real estate auction business for a long time.

Additionally, read the Contract for Sale of Real Property and the Auction Terms and Conditions thoroughly before registering for online bidding. Reputable auction companies provide clear and detailed instructions on buying foreclosure auction properties online to protect not only themselves but also buyers.

Goldman sold a total of 158 foreclosed condo units in its Kendall project called Downtown Dadeland for only $113,000 each, equivalent to just 33 percent of the cost of construction and the land. The units are part of a seven-building residential and commercial complex in Kendall, which is about six miles from downtown Miami.

According to Peter Zalewski, founder of Bal Harbour-based property brokerage Condo Vultures LLC which reported the condo sale on its website, Goldman took a big price cut from the sale.

The fortunate buyer was a partnership created by Nova Scotia-based Southwest Properties Limited and Armco Capital, which made a cash payment of only $17.9 million for the condo units. The payment is equivalent to around $109 per square foot, substantially below the estimated building costs of around $300 per square foot, based on computations made by Jim Spatz, chief executive of Southwest Properties, and by Condo Vultures owner Zalewski.

The deeply discounted foreclosed homes sale is nonetheless not a rarity in the Miami area, where average condo prices have fallen by 37 percent over the past year to only $137,900 in the July-September quarter.

Based on a report released by the Florida Association of Realtors, sales of condo units have increased by 43 percent to almost 1,800 units during the quarter because of the sharply discounted prices. In September, the median prices for new and pre-owned houses and condo units dropped to $159,000, marking a 30-percent drop from the median in September last year.

The Downtown Dadeland, which had its groundbreaking in 2003, was sold at a low price despite its being next to the popular Dadeland Mall, which is operated by Simon Property and which is anchored by the biggest Macy’s store in South Florida.

The condo units range from studio units to three-bedroom units measuring 1,100 square feet on average. According to Spatz of Southwest Properties, the partnership will rent out the condo units for about 3 to 5 years until condo prices in Miami improve.

Goldman Sachs disposed of only the condo portion of the Dadeland development in the foreclosed homes sale. It still owns the commercial portion of the complex. According to Zalewski, the complex was built at a cost of $224 million and Goldman Sachs acquired it through foreclosure.

The bank’s bid of $13 million was the only offer made on the building. Typically at foreclosure sale, banks bid the total mortgage amount owed to them. According to industry experts, this is the second time in almost five years that banks took ownership of Gateway Center after borrowers missed on their mortgage payments.

During the auction, Joseph R. Paolino Jr., former Providence mayor and a downtown landlord, asked several questions about Gateway Center, including whether it has occupants and if taxes are current.

The downtown building has been vacant after Fidelity Investments relocated its workers from the city to the Smithfield offices of the company.

According to industry experts, Class A office spaces are clogging the Providence market. The Gateway Center belongs in this category which made it difficult for the 135,110 square feet building to attract tenants.

Compounding the problem of the building is its configuration into a single large tenant. Experts said that single large tenants prefer suburban settings which they deem more convenient compared with a downtown location.

Furthermore, the building is embroiled in a complicated financial arrangement. The Gateway Center stands on a land owned by Capital Properties. Since 2006, the land has been leased from Capital Properties by RI Gateway Properties, which owns the building. The lease for the land was later acquired by RI Gateway using an $18.8 million loan it took out from Wachovia Bank. RI Gateway secured the loan by mortgaging the property rights that it owned as part of the lease.

Industry experts explained that the foreclosure auction involves the lease owned by RI Gateway and not on the land ownership of Capital Properties. In short, Capital Properties has never been a part of the foreclosure process.

Experts added that the state pension system was the previous owner of the building’s lease until 2006. The state pension system took over the lease ownership after the previous owner defaulted. The pension system decided to sell the lease to RI Gateway after it got entangled in bankruptcy proceedings. The Gateway Center’s construction was made possible by a $23 million bond issued by Rhode Island.

The home ownership rate rose nationally to record high in 2005, but started to drop when the foreclosure for sale spread like wildfire across the country. The national home ownership rate peaked at 69 percent in 2004 and declined by 67.4 percent last quarter.

For those who are not familiar with the housing market, the decline may just be a small amount but each percentage point is equal to about 1 million people.

According to industry analysts, many homeowners who lost their properties to foreclosures ended up becoming renters, with many more moving in with their relatives or friends.

Analysts said that the current home ownership trend is not temporary. They explained that the collapse of the housing market, the difficulty in obtaining credit and demographic changes contributed to the drop in home ownership rate and the rise in the number of people who rent.

They pointed out that in the long-run, landlords will benefit from the current trend as home ownership rate is expected to return to levels seen 20 or 30 years ago.

Arthur Nelson, a professor at the University of Utah, estimated that the rate of home ownership will drop in the next 20 years by nearly 64 percent, similar to the 1990 level or lower, but will not drop below 60 percent.

He explained that people who are 75 years or older prefer to rent rather than buy houses when they move. He pointed out that this age group is increasing in size faster and will double in numbers in the next two decades.

Another reason cited by Nelson for the projected drop in home ownership is the return of stricter lending standards, including a 20 percent deposit. Some analysts agree with Nelson’s projection, adding that home ownership seems to have a two-thirds natural limit.

However, many analysts believe that there is a possibility that the natural limit may change, citing the home ownership rate of 65 percent which was the average from 1965 to 1995. They claimed that the average home ownership rate before those years was much lower.

And compounding the problem in the drop of home ownership rate is the expected rise in foreclosures as the growing number of homeowners who lost their jobs is starting to run out of funds to pay their mortgages.

The lender sued the Midtown-based developer in connection with the defaulted loans amounting to $51.7 million for a condominium conversion project located in New York City. Both Manhattan Capital and RREEF Global are converting a 14-story building into an 84-unit luxury condominium.

Bayerische Landesbank filed the bank owned foreclosure lawsuit before the New York State Supreme Court in an effort to repossess the note. According to court records, the bank claimed that Manhattan Capital had missed payments on the loan starting in February.

According to the bank, the borrower defaulted on its loan and has failed to make its account current despite repeated demands made in writing on March 19 and June 15 of this year.

The developer is supposed to make a closing on its first sale but the filing of the foreclosure case put everything on hold. Meanwhile, it plans to file an amendment with the office of the Attorney General to allow buyers to revoke their contracts and refund their money.

Units in the luxury condominium have a price range of $585,000 to $1.825 million. Meanwhile, bank owned foreclosure lawsuits and amendments for rescission are becoming common in the commercial real estate market due to the economic downturn.

Last March, a foreclosure lawsuit was also filed against the Jasper commercial building which was converted into a condominium. In
April, buyers at the Linden78 building were given rights to rescind.

According to data, about 48 percent of the Manhattan Capital-developed condominium units were sold. Aside from the delinquent loan payments on the condominium project, Manhattan Capital also owes contractors over $2.1 million. According to the office of the New York County Clerk, contractors involved in the project have not been paid and they filed mechanic’s lien.

The contractor with the highest lien value is My Jamie Joseph Only, an air-conditioning, heating and plumbing sub-contractor that claims $1 million on the project.

According to attorney Sandor Krauss, once a loan is in default, the borrower is required to notify the buyers. However, several buyers said that they did not receive any bank owned foreclosure notification from the developer.

Today, it is a bastion of growth and serves as a proof that there is life after foreclosure. The plan for the construction of Concordia condominium started in 2004, during the peak of the housing market in Lee County. By 2005, while the condominium is under construction, its unit price range from $256,000 to around $475,000.

After two years, 50 percent of the planned 340 units and 34 buildings had been built. However, around September 2007, Concordia succumbed to the pressure of the collapsing housing market and the rising bank owned homes foreclosures. Sales were affected by falling home prices which led the Florida Community Bank to file a foreclosure action amounting to $23.4 million against condominium developer, Concordia Cape Coral LLC.

Florida Community took over the project with Steve Price, president of the bank, leading the effort to continue the development of Concordia after several offers to purchase the whole development failed to materialize.

Now, two years after it was taken out of bank owned homes foreclosures, 90 condominium units have been sold, according to Concord Wilshire Realty director of marketing Susan Lucia. Lucia also added that the remaining five buildings of the project are now under construction.

Lucia, whose company handles the marketing and selling of Concordia units, explained that the strategy involves selling the remaining units immediately by reducing their price by as low as $77,000 which is three times less their price during the peak of the real estate market.

Additionally, she said that Florida Community has been investing money into amenities and landscaping which were neglected when the property was still under foreclosure.

On the other hand, while everything is rosy with the Concordia, the future of Florida Community’s other project which it recovered from foreclosure is in limbo.

The unfinished Zoomers Family Amusement Park was taken out of bank owned homes last year after an $11.4 million foreclosure case against developer and owner Ronald Heromin. The bank is still waiting for a buyer to finish the project.

City officials in Perris, California knew that deteriorated foreclosed properties could not entice buyers and so they decided to hire David Milligan, a hazardous-waste specialist, to paint green the brown and dying grasses on lawns of foreclosed homes.

The makeover project is designed to protect the value of the bank foreclosure house and to make it attractive enough to entice potential buyers. That is why city officials were pleasantly surprised when their project did not just lure potential buyers but also news crews from various countries who filmed the makeover process.

News crews from Germany, Spain and Finland and from local media troop to the city to witness and filmed the front-yard makeovers. A television crew broadcasting to Austria, Germany and Switzerland filmed Insta-Green USA’s workers as they spray-paint a yellow lawn at the Monument Ranch subdivision in Perris.

Focus TV Productions editor Kirsten Moser said that what Perris is doing has an international appeal because it provides a glimpse of the other side of the housing crisis, and not just the usual depressing foreclosure news.

Perris is located in the Inland area which has experienced the highest number of bank foreclosure property in the county. In April, about 4,000 foreclosure notices were served to homeowners in San Bernardino County and 5,000 in Riverside County.

Vacant houses have become targets for squatters and vandals, unattended swimming pools turned into habitats of disease-carrying mosquitoes and dead and decaying lawns destroyed the appearance of neighborhoods and pulled down home values.

Because of the increasing number of vacant properties in the area, some Inland cities, such as Riverside and Rialto, have required lenders to maintain their properties and keep them free from weeds, trash and graffiti.

Milligan, who was hired by Perris in March, has so far colored the grass and beautify the lawns of 23 homes in the city at a maximum cost of $650 each. He explained that the color painted on the grass would last a maximum of four months then the dye, which is light sensitive, would start to break down.

For colorant, Milligan is using the non-toxic dye, kale pectate, which is usually used on golf courses, to spruce up the lawn in a bank foreclosure property.

People who are doing the caretaking of foreclosurehomes for sale for realtors are called home tenders or managers. Their task was to furnish the foreclosed home, maintain and keep it clean for realtors to show to potential buyers on a moment’s notice.

Companies such as Home Tenders of America match foreclosed home for sale with live-in home managers in an effort to give them an advantage over their competition.

The continuing increase in the number of bank owned homes has created an oversupply of foreclosure homes on the market. And because of this, banks, lending institutions and other sellers find it difficult to sell the properties in their inventory despite the low market price.

In Arizona, Home Tenders of America and Showhomes train home tenders or managers who are considered as independent contractors. As live-in home managers, they pay a small rental fee, insurance and utilities in exchange for keeping the foreclosed house spick and span and a model property for buyers.

For example, Home Tenders of America would put out an advertisement for someone who is willing to rent a 2,800 square foot home with its own swimming pool, located in the gated community of Cave Creek for $1,200 per month.

The person is then contracted to become a home tender, and after several months, the foreclosed home will be sold at a price that satisfies the seller. However, the home tender must be prepared to move in the event that the house will be sold.

Showhomes and Home Tenders of America work with realtors, homeowners, builders and banks to help sell foreclosed properties which are flooding the housing market. These companies make sure that sellers will have a clean and nicely decorated house to show to potential buyers.

Another benefit of having home managers is that an occupied home fetches a low insurance rate and a higher market price than vacant properties. These companies profit from monthly fees of home tenders and pre-negotiated fees from owners.

Some banks are working with these companies to hire more home tenders for their bank foreclosed homes and to reduce the risk of vandalism on properties.

The bill, voted 91 to 5, would protect mortgage servicing firms from litigation if they modify loans under government foreclosures schemes and would require lenders to notify tenants of foreclosure homes at least 3 months before eviction.

The measure would also expand efforts to mitigate homelessness, which has soared as families were forced out of homes they have lost to private lender and government foreclosures. It allotted $2.2 billion to directly help homeless people and another $440 million to finance homelessness prevention projects.

As now known by many Americans, the provision of this bill that would have empowered judges to modify loans of homeowners in bankruptcy was rejected by the Senate, so this measure would be stricken out from the broader bill.

As of date, most government foreclosures programs have not progressed as expected, especially the Hope for Homeowners initiative which was launched under the Bush administration in 2008. President Obama’s government foreclosures program, dubbed Making Homes Affordable, has been slowed down by the failure of lenders to modify more loans due to various reasons.

Also included in the new bill are measures to help the Federal Deposit Insurance Corp. FDIC would be able to increase its borrowing authority from $30 billion to $100 billion. With the additional funding authority, FDIC would be able to help banks with reduced deposit insurance premiums. The bill would also extend FDIC’s $250,000 maximum deposit insurance to the year 2013.

While the new bill allocated an additional $2.3 billion drawn from the $700 billion TARP fund for various allocations, it did not allot any additional money to help homeowners in danger of private lender or government foreclosures.

Democratic Senator Christopher Dodd, head of the Committee on Banking, explained that most of the provisions in the bill are aimed at supporting government foreclosures initiatives.

Another Democratic Senator, Jack Reed, who worked for the homelessness provisions of the bill, said he campaigned for the provisions to help homeless people because the flood of private lender and government foreclosures has pushed up homelessness rates to a point where there are already stories of tent cities emerging.

The legislation, coded Senate Bill 2513, would give defaulting mortgage borrowers 90 days to seek HUD-certified foreclosure prevention counseling and negotiate a loan modification with their lenders before they are given a foreclosure notice if the mitigation processes fail.

Among officials pleased by the signing of the legislation into law is Clerk of Cook County Circuit Court Dorothy Brown, who had been notifying state officials about the rapidly rising number of foreclosure properties in Cook County. Brown said she sent a letter to Governor Quinn in March urging the governor to sign the legislation.

Based on data from cases of foreclosure properties filed in Cook County’s Chancery Division of the Circuit Court, the average number of foreclosure cases filed daily during the days following President Obama’s inauguration increased from 161 filings to 239 filings, representing a 50 percent rise. This figure further increased by 16 percent to 277 daily filings after President Obama launched his foreclosure prevention program in February. Compared to foreclosure data before Obama’s inauguration, the average foreclosure filings per day in Cook County increased by 72 percent.

Brown argued that the continued rise in number of foreclosure properties indicate that some mortgage banks in Illinois have not been using part of their bailout funds to modify loans. Brown reiterated the need for state governments to intervene and prevent families from being evicted from foreclosure properties.

In 2008, Cook County had a record breaking 43,726 foreclosure filings in court, representing a 338 percent increase compared to 1998 figures. In February and March, 4,672 foreclosures and 4,913 foreclosures were filed, respectively. These big numbers pushed total Illinois foreclosures to high levels, putting Illinois among the ten U.S. states with the highest foreclosure rates.

In addition to calling for foreclosure prevention legislation measures, Clerk Brown has also organized another Mortgage Foreclosure Education Summit to be held in April in Matteson. She will be working with Matteson village officials, church leaders, local officials and volunteer lawyers to provide advice to seniors and other homeowners on how they can prevent their houses from becoming foreclosure properties.