Recently on KOMO News

http://www.komonews.com/news/local/64645512.html?video=YHI&t=a


SEATTLE -- If there is a canary in the coal mine for real estate, it may be found at the weekly foreclosure auction in each county.

Just six months ago, the auctions were dead.

"The banks were not discounting anywhere near where they are, which didn't entice investors to come down here," said professional investor Will Heaton.

"And also the retail market was horrible. Nobody could qualify for a loan. There really was no incentive. Everyone was afraid to buy."

But the number of homes going into foreclosure increased dramatically in the past weeks, and banks who want them off their books are willing to deal.

Heaton managed to get a steal at an auction on Friday.

He won a house that sold two years ago for $650,000. Its current market value is roughly $500,000. The owners owe the bank $479,000.

At the auction, the bank got $150,000 from Heaton.

The bank lost out on big money in the deal, but they're still willing to deal. As for the reason why, here's where the taxpayers come into the equation.

Remember those billions of dollars congress gave the banks - the TARP bailout program? It has filtered down and we, the taxpayers, are covering the bank losses.

"The government money has run its course," said Jim Milgard. "And so they have their TARP funds; they've actually got this properties paid for by the government. So its given them the ability to sell the property at a discount."

So the taxpayers have a hand in generating some great deals at the weekly foreclosure auction, and you can find some great deals if you can pay cash on the spot.

And as the unemployment rate continues to climb, the number of homes going to auction is expected to go up as well.

Next week, more than 800 homes are on the slate to be auctioned off in King County alone.