The well-advised homebuyers now prefer to look first at foreclosed properties before short sales. Discounted deals certainly can be had in this market as real estate market prices have been bouncing on the lows for nearly a year now. Supply is definitely ahead of demand. In Florida, one of the hardest hit states in the real estate crash that began with the 2006-2007 US economic downturn, state figures showed a surplus of 300,000 homes.
Certainly, homebuyers will be very happy taking advantage of the decline in prices of new homes. Nevertheless, an lower home cost acquisition can be realized by the purchase of a foreclosed or short sale property. But which is better?
Purchasing a foreclosure can be about 25 percent lower than the cost of a house priced at current market value, one survey showed. And there are a lot of opportunities available within the current pool of homes for sale. Over a million home mortgages were up for foreclosure in 2007 alone. As for Florida, considered as the state with the most delinquencies in mortgage loans, there were as many as 80,000 foreclosures in a single three-month period, which was recorded during the 2009 third quarter.
Buying a foreclosed home indeed is advantageous, but such a move has to be carefully considered to avoid certain pitfalls. Usually, snags can be avoided through a thorough examination of the titles of foreclosed properties being considered for purchase. The buyer has to exercise due diligence to discover the titles’ liens, if any or at least ensure the title company you hire does a very through job.
If you are interested in purchasing a short sale the outstanding loan balance of the pre-foreclosed property has also to be evaluated. Those that require close scrutiny are the short sales involving buyers with second mortgages. More often than not, these home loan borrowers are so upside down in their mortgages that the multiple banks involved may be very reluctant to take a severely discounted offer. Banks holding second mortgages can be very difficult to deal with and will be reluctant to forgive all of the debt so the home can close. If the current home owner can not contribute any cash to the second mortgage lender, it could be up to the buyer to pony up some additional cash in order to close the deal. Sound like a headache? It certainly is.
Thus, the properties to avoid are the short sales that do not have a bank approved price or those with second mortgage lien holders. The time required to wade through all the red tape could find your offer being rejected. In the mean time you have missed many good deals that you could have closed in a month or less by purchasing a foreclosure.
The appeal of a foreclosed property will also certainly depend on its location. To be a sure winner under this criterion, among the safest bets are the foreclosures in Bradenton as well as those in Sarasota, Florida. Sarasota and Bradenton foreclosures possess the locations that made Florida one of the leading choices for second home buyers in the first place: World-class sports and leisure facilities, prestigious arts and entertainment centers, and environment-friendly communities. And then there are the top-notch beach resorts that have converted many visiting tourists into long-time Florida residents. These tourists ensure there is a steady flow of new buyers in the future that will be looking for your property when you decide to cash out in our next boom cycle off in the horizon.
I am a real estate broker in Bradenton Florida currently assisting many buyers and investors with purchasing Bradenton foreclosures. More information on Bradenton real estate can be found by following the links.