I don't usually blog twice in one day but...........I have had several inquiries lately about foreclosures. I do know that foreclosures are on the rise nationwide, with Florida being #1 or2 on the list as the state with the highest rate. Up until now there have been very few foreclosures in our area. Many of the foreclosures in our area now are due to the fact that people bought at the height of the market with interest only loans with the intention of flipping and were basically CAUGHT! The problem with this is that the mortgage is now much more than the market value. The basic process of foreclosure (and I know there are experts out there, so don't hesitate to chime in!!) is.....a lien is filed----this could be many months after the owner has stopped making payments. That lien is recorded and could be many more months before it is auctioned off on the court house steps (I seen a property in pre-foreclosure for almost a year). If no one buys it at the courthouse steps then perhaps a bank will list it with a real estate company. The bank, of course,will try to get as much money out of it as they can. They will start off high and every several months reduce it a little. This process can take another several months. Foreclosures CAN be a great deal if you can get it for under market value----and believe me, I'm keeping my eyes out for such deals. However, all I have been seeing of late are those properties that are mortgaged out way above current market values!!!!
I honestly believe there are better deals out there right now--better than any foreclosed property that I can know of. The key to getting a good deal right now is making offers. Find a property that you want, figure out what you are willing to pay, and make an offer. If they turn you down, find another piece of property, make an offer------sooner or later a seller will accept your terms! I'm not saying to make an offer of $150,000 on a 350,000 house. But I am saying on a $299,000 beachside townhouse--A strong offer of $250K might be a good place to start. Of course, you should know before you make the offer if it is something you will be able to afford--a pre-approval letter (or better yet,a cash offer) with your offer and a good escrow deposit make your offer strong and harder to resist. Your realtor (hopefully ME) can show you comparable properties and what they have sold for and steer you in the right direction. It is extremely important for you to trust your realtor---if you don't--------FIND ANOTHER ONE! Remember, we make a living by repeat business----it pays for us to be honest and upfront with you!!!!! Also, remember, we do not have a crystal ball----we can't tell when the market is going to go up or down---or how far the market is going to go up or down. We can only tell you what it is doing RIGHT NOW! We have all bought properties in the last couple of years that are now not worth as much---however, I have always said that real estate is a great LONG TERM INVESTMENT. I have been fortunate enough to have "flipped" a couple of properties--however it was by the Grace of God alone, because that has never been an intention of mine. I have always bought a property with the intention of keeping it for at least 5 years.
So, in a nutshell. Foreclosures can be great deals, BUT NOT ALWAYS. Foreclosures are not the easiest way of getting a good deal. There are better deals out there right now than foreclosures.
Feel free to post a response or send me an email.