Are Foreclosures Truly Good Deals?

By
Real Estate Agent with Mountain Place Realty

With the number of foreclosures jumping 60% over the past year, the question often arises....are foreclosures truly good deals?

In reality, a small percentage of foreclosures are, indeed, worth your time.  However, there are a couple of major issues that affect this opportunity to get a great home at a great price.  For instance, struggling homeowners often pull all equity out of their homes in a last ditch effort to avoid foreclosure.  Mortgage companies allow this to happen because they want homeowners to keep their homes as well. (Mortgage companies want to make loans, not sell real estate.)  Once all equity is pulled out in a declining market, then the home is no longer worth the payoff. 

A second issue to consider when looking at foreclosures is the condition of these homes once homeowners relinquish custody.  Sadly, the majority of these properties are not in livable condition.  If you choose to purchase such a home, then who do you think will be doing the pricey repairs?  Probably not the mortgage company.

Truly, the best way to get a great deal is to find pre-foreclosures.  At this stage, most homeowners are willing to take a loss to save their credit.   Distress sales, often referred to as fire sales, are a great way for investors to purchase properties with immediate equity.  With recent jumps in foreclosure filings, banks are more willing than ever to work with buyers and sellers in creative ways, such as the ever popular short sale. 

If you are interested in foreclosures, we have a list of them from local Blue Ridge, GA  banks.  We also have several properties that fall into the category of "pre-foreclosure."  For more information, visit http://www.realestategamtns.com/ and fill out a request form.

 

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Tags:
equity
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Rainmaker
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Tony & Darcy Cannon
Aubrey and Associates Realty - Layton, UT
The C Team
Christy, Great post!  I think that the best deals are those in which the seller has enough equity to be priced competitively in the market.  These homes have generally been lived in for more than 5 years and have been taken care of even better than the short sale homes.  These are the rare gems to be found (at least in our market).
Mar 26, 2008 05:42 AM #1
Rainer
15,805
Josué E. Silva
Tierra Antigua Realty - Tucson, AZ
Short Sales can be good deals if mainly the Listing Agent does their job the right way and knows what they are doing. From experience in Short Sales/Foreclosures for the past 4 + years, I stronly believe their are more deals with short sales than with normal sales, due to the job done right. No, I'm not perfect, prayer has helped me too.
Mar 26, 2008 06:56 AM #2
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Rainer
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Christy Reece

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