Foreclosure Web sites expand audience

By Michele Gershberg

NEW YORK (Reuters) - Foreclosures were once the turf of the most aggressive investors, but these days ordinary home buyers can hunt for fire-sale house prices on a wealth of Internet sites.

Large real estate sites such as PropertyShark.com and RealtyTrac.com showcase a growing number of U.S. properties in pre-foreclosure and foreclosure, a phenomenon that is becoming far more common with the U.S. subprime mortgage meltdown.

They pull together thousands of listings based on public information, adding photos or aerial images of the houses and eliminating the need to sift through court documents. In some cases, they offer phone numbers of homeowners and court dates.

In March, Yahoo Real Estate opened a comprehensive site on foreclosures together with RealtyTrac, expanding the reach of such data to its nearly 500 million global users.

"The goal for you as a buyer is to purchase a property at least 20 percent below full market value, although better deals are often possible," Yahoo's site tells the uninitiated.

Perhaps the most significant change is that ordinary home buyers are making more use of these sites, less hesitant to capitalize on the financial misfortune of others.

They will find many more opportunities, as the U.S. foreclosure rate by the end of 2007 had risen nearly 80 percent from a year earlier.

"It is what it is. I'm not going to sit here and tell you otherwise," said Bill Staniford, partner at PropertyShark. "This is a debacle going down from the top of government to the mortgage brokers. There's lots of blame to go round, but the more people in this industry there are, the better off the homeowner."

WAIT FOR THE GAVEL

Potential buyers are also getting involved earlier in the process, finding a way to speak directly to owners on notice for default rather than wait for the gavel to come down.

"Many people think about the auction when they think about foreclosure. They get fixated on it," said Staniford. "But most of the transactions are getting done before the auction."

RealtyTrac says traffic to its site has tripled to about 3 million unique visitors every month from 1 million just two years ago. It estimates as many as 40 percent of visits come from first-time home buyers rather than investors or brokers.

Yahoo Real Estate saw a fivefold increase in traffic to its foreclosure listings since it expanded the site last year.

"There are a lot of people who have been priced out of the market and they're seeing their rents go up," said Rick Sharga, vice president of marketing at RealtyTrac. "Probably until next year, the level of foreclosure activity will remain at historically high levels."

RealtyTrac is seeing increased interest in its site from overseas investors, fueled by a weak U.S. dollar. The company aims to expand its subscription U.S. listings service to foreign nationals as early as 2008, and may eventually offer foreclosure information from markets abroad.