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The ease at which people could enter forbearance programs during the pandemic has caused a drastic drop in the number of distressed properties that are sold at auction. Now that many of these protections have expired some borrowers whom do not have sufficient equity to cover the transaction costs of selling plus the deferred principal and interest payments will have to put their homes up for auction. 

Buy why do more first-time homeowners not consider auctioned homes into their home search? Well, the answer varies. 

Recently, the Urban Institute partnered with Auction.com to explore this path to obtain a very affordable home and why more people do not explore this opportunity. The Urban Institute chose Auction.com as their research partner due to its market position: Auction.com has been around since 2007 and is now the preeminent auction platform for distressed properties in the country accounting for about 50% of all public auctions nationwide.  

Auction Sales to Owner-Occupants Are Low but Increase Substantially for Resale Properties 

According to public tax assessor data collected by Auction.com, a quarter of Auction.com sales were sold to owner-occupants, with a higher share of foreclosure sales (30.1%) than REO sales (20.5%) sold directly to owner-occupants. Research also found that nearly all owner-occupants chose to use cash to fund their purchase rather than obtaining some sort of financing. 

Typically, REOs are older and require more repairs which may become a burden for new homeowners with nowhere to turn to get financing for the repairs.  

Read Full Article {Source: www.dsnews.com]

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