FORECLOSURES…BARGAINS?

Buying a foreclosure used to be just about a guaranteed bargain. Buyers would go to the courthouse steps and make a bid on a property purchasing it directly from the bank’s representative. The home may have needed repairs and the bidder may have had to evict the previous owner, but nearly always, the home was selling below market value and the new owner would have instant equity.

Think about it, just 10 years ago, most purchasers made a down payment. Mortgage payments not only paid interest but also paid the principal down as well. And because the market was appreciating, the property would probably have appreciated from the time of purchase .

Fast forward to 2008, where home values are either stagnant or in decline. Recent owners often bought their homes with no money down and interest only loans. Many refinanced and took out their home equity. Many of the homes currently in foreclosure are upside down in value.

When I am asked “Do you do foreclosures?” The answer depends on what you mean by foreclosures? I cannot help you make a bid at an auction or at the courthouse steps. But I can help you look at foreclosures that are now a Real Estate Owned property (REO). Today, most foreclosures will end up under the bank’s umbrella as a REO, using realtors to market the properties through the MLS. I have access to those properties. Many are listed at significant discounts and are worth going through the hurdles that working with a REO entails. There are incredible opportunities out there, but now more than ever, it’s important to work with a buyers agent who can help you navigate the ins and outs of this current market.