Buyers losing interest in home foreclosures in U.S.

FORT LAUDERDALE, Fla. — At a time when foreclosures continue to mount, there's less of an appetite to buy these distressed homes, according to a survey released this past week.

The November survey, conducted by Harris Interactive for real-estate tracking firms Trulia.com and RealtyTrac, showed that 47 percent of U.S. adults would consider buying a home in foreclosure.

Even months ago, 54 percent said they'd like to scoop up a foreclosed property.

The decline is attributed to prospective buyers gradually understanding the negative aspects of dealing in foreclosures or so-called short sales, in which lenders take less than what's owed on the mortgages and forgive the remaining debt. Some buyers cite hidden costs, a difficulty in getting banks' attention and the poor condition of many of the homes.

"It's a little more complicated buying a foreclosure or short sale," said Rick Sharga, a senior vice president of Irvine, Calif.-based RealtyTrac. "The banks are overwhelmed with properties, so in many cases it becomes a waiting game, which isn't any fun if you want to buy a home."

Although lenders are modifying loans and issuing foreclosure moratoriums during the holidays, analysts say a second wave of foreclosures will happen next year as more people lose their jobs and more adjustable-rate loans reset.

"There are no quick solutions," said Pete Flint, co-founder of Trulia.com, an online real-estate search engine based in San Francisco.

To compensate for the perceived risks in a foreclosure sale, more than three-quarters of buyers surveyed think they should get a discount of 25 percent. Three in 10 buyers surveyed said they're looking for at least a 50 percent price cut.

"People should get a break on these properties," said Pamela Orr, an agent with Balistreri Realty in Broward and Palm Beach counties in Florida. "But you have to be realistic. It's all based on what other homes in the area are selling for."