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Foreclosures soar: Good time to buy?

By Kristine Uyeno bio | email

HONOLULU (KHNL) - More bad news in the housing market.

Foreclosures in Hawaii took a huge leap last month, increasing 503% since last year.

So is it a good time to get a great deal on a foreclosed home?

"In many respects, it's not necessarily true that a foreclosure would lead to a good deal," said Scott Higashi with Prudential Locations. "When the home goes into foreclosure, the owner is the bank and the bank has most to lose, especially depending on how big the mortgage is, so it's typically the bank who's the successful bidder because they're trying to reduce their risk."

If you're looking to take advantage of foreclosure filings, keep in mind: your primary competition at the auction will be the bank. You have to buy it, sight unseen, without an inspection, and you need to bring cash or a check that day to secure your position. If you're not successful in getting a good deal on a troubled home, experts say, don't worry. With low interest rates, and a lot of inventory out there, Higashi said, "it's definitely a buyer's market."

He believes it's a great time for first-time homebuyers, who can receive an $8,000 tax credit from the government.