It usually takes about six months from when the house is repossessed by the bank (REO) by not being sold at the foreclosure auction. The bank works with a local Real Estate Broker to assess the value of the house then decide on the Listing price.
It may be different elsewhere but in my area for years now the bank and realtor usually look for a perfect condition retail price for the house when in reality there could be $15,000.00 - $20,000.00 in rehab to deserve the listed price. So, of course the house doesn't sell, the listing expire's and it is now a year since the foreclosure auction. Now is when the bank finally realizes that they have lost a heck of alot of money on this house and are more than ready to sell the house for a drastically lower price.
That's they way it usually happens. But now that the banks are way beyond their gov. controlled balance of property taken back and loans made, I think that the RE Brokers may be put in a very precarious situation.
I can't see how the banks and mortgage co's can afford to sit on the house for the usual year to sell thier REO's. The loss mitigation dept.'s are going to have alot more desks in their office or the deals on houses are going to be made very, very fast.
The way the housing market is headed this year probably both will happen.
I'm a realtor in the Ridgecrest area and I know that we are not seeing as many foreclosures in our area simply because the loan issues that a lot of other areas have experienced are not as big of a problem here. Our market also wasn't priced as high as other areas when they were taking out these loans therefore they aren't so financially binding. The loan crisis hits areas in different ways. And not all areas are following the foreclosure trends. However, there are foreclosures in our area still-just not a whole lot.
In some cases the homes are foreclosed and then there is an eviction process to go through and that can take awhile.