Buying Foreclosures, Short Sales & REOs
Many parts of the country are seeing an uptick in foreclosures. While it is distressing news for sellers who find themselves facing foreclosure, it is also a ripe opportunity for savvy buyers to pick up what appears to be a good deal. But before you go skipping down the Yellow Brick Road to foreclosure and short-sale land, bear in mind that what seems to be a hot way to buy property on the cheap might not pan out the way you think.Last week I ran a search on homes for sale in Elk Grove, CA, which was named a couple years ago as the fastest growing community in the country. There were 567 listings in 95624, 382 of which are priced under $500,000. Of those homes priced under $500,000, 51 were listed as a short sale. This means 13.35% are in default.
If you're in the market to buy foreclosures, short sales or REOs, scrutinize the market value carefully, because you might find the bulk of those properties were purchased with very little or nothing down. So the equity you hope to gain might turn out to be nothing.
Ready to Read More Articles About Foreclosures and Short Sales? Click below:
- Tips for Buying a Short Sale Home
- Drawbacks to Buying Foreclosures
- Guide to Selling a Short Sale Home
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Comments
We get a lot of interest in foreclosures. When we educate potential buyers about the process they would have to go through to purchase a foreclosed property, 100% of them take a pass. What they really want is a good deal, not a lot of hassle.
There’s an interesting article at Business Week on how the term “short sale” is being used as a marketing phrase.
I don’t think agents use the term as a marketing ploy where I work. But a lot of them don’t know what’s involved in selling a short sale. The first thing I ask them is “Have you talked to the lender?” 99% of the time, they have not. So it’s not a short sale. It’s just a seller who is upside down.