Two deserts and two oceans.
These are the locations many have been reading about these past few months.
The four places in the nation that saw a great run-up in price in the middle of the decade and, consequently, they have also seen a steeper decline in home pricing in the past couple years.
- The two deserts are Las Vegas and the Phoenix area.
- The two ocean locations are Florida and California.
With the news of foreclosures, potential buyers have been approaching me (and other real estate agents) with this question:
"So.... uh... do you know where I can find a really good deal on one of those foreclosed properties?"
Short answer: "Yes."
Longer answer: "Depends on what you're looking for."
Over the past months I've been showing many more bank owned properties than ever. It's unavoidable... there are so many out there. Here are a few things to keep in mind:
- If you're using FHA financing the property will need to be in good shape. Major fixer-uppers will not make the grade.
- If the property has been purchased and fixed up recently (a fix and flip) "seasoning" could come into play. In many cases a property needs to be owned for 90 days before it can be insured during the transfer of ownership. Cash buyers need not worry- but those who are financing will need to take note.
- Buyers who do not have experience with construction estimating will want to consult with someone who does before purchasing "as is" properties. It's possible for the bargain to become a money pit.
- Banks are not always ready to deal and may not be in as big of a hurry as one might think. They need to do their own due diligence- so there are steps they'll take before taking huge losses.
There we go... a few rules of thumb for those thinking about such properties. Though I don't discourage people from purchasing bank owned homes, I do advise to go in with discernment. And yes... there are many outstanding values out there. Let's just make sure we know a few rules of the game before we decide to pursue this path to ownership.
In my next post I'm going to be speaking about making offers on bank owned properties.
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Chuck Willman is a real estate agent specializing in assisting first time home buyers and investors interested in purchasing property in the Phoenix metro area cities of Arizona. See him at www.azVest.com or by phone: 480.292.0600.
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Photo Credit: "Lost 3" by Sanja Gjenero
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