Finding Short Sales and Foreclosures for Value
Sometimes you have to get creative to find the best bargains here in the quad city areas. Depending upon your financing and method of paying for a house, timeline, and ability to invest in improvements may be the deciding factor. Have you ever thought about buying a short sale or foreclosure in the Prescott area?
If you’re in the market for a Prescott Real Estate for Sale and finding a great deal, short sale of foreclosed properties can be an attractive option. It’s simple enough to discover a listing in a neighborhood that could be otherwise out of your price range, yet don’t be tricked by what looks like a good deal. Buying a foreclosure is something you ought to seriously review prior to purchasing or composing a deal. Check out my blog on “The Pros & Cons of Buying a Foreclosure” for more on the specifics.
If you’re up for the inherent risks, you’ll need to know just how it changes from a normal real estate transaction, what options you have, and where to look.
As a whole, when buying a foreclosure anticipate an extremely impersonal experience. You’re probably communicating with the lending institution or bank that possesses the property and for them, it’s just a business decision and about the bottom line. If the numbers make sense they’ll make the deal, and also if not then they will not.
Understand that a foreclosure is a process and there are multiple stages during this transaction and the bank will offer no assistance when it comes to issues with the house. At specific stages, you may discover the better the deal usually equates to more risk, and in other stages, you could take in less risk. Although, dealing with risky ventures usually coincides with less of a bargain in the long run.
What are the benefits when finding and investing in Prescott Foreclosures?
- Price: This is the most obvious benefit people look for in Foreclosures is the price. Everyone wants a deal and banks usually want to unload these types of properties and clean their books of any debt. The longer these homes are on the market their value goes down and costs go up with maintenance, taxes and other fees associated with vacant homes. Because banks are eager to sell these properties, homeowners and investors alike can find great value in purchasing Bank Owned homes. This drop in price will also bring down neighborhood comps with discounted houses being used as comparisons.
- Options: Bank Owned properties or REO’s are available at a number of price points, from small condominiums to large custom homes. So regardless of a person’s budget, you can find diamonds in the rough if you work hard enough looking for the right properties
- Value and Appreciation: Discovering a good Bank Owned house is usually synonymous with finding a home that needs a lot of work. Whether you purchase a home that needs minor repairs to full on remodeling work, these upgrades and repairs will add future value. Done correctly, fixing up a foreclosed home can definitely add value and appreciation to anyone when they go to sell their property.
- Community Giveback: Bank Owned listings can bring down overall property values in a community. Purchasing one of these homes and improving it, eventually, adds value to the community and drives prices up. Similarly, these comps can bring down neighborhood values when they are first sold to an investor.
My Very First Real Estate Investment – From Foreclosure To Performing Note https://t.co/VB73BUvTeC
— Dominic Scacci (@dominicscacci) May 12, 2016
Drawbacks of buying Foreclosures (or any Bank Owned property):
- Sharp competition: There are people who make a living finding these types of homes, fixing them up, and then flipping them for a profit. Then there are those first-time home buyers who just want to get a good deal on a home. Finding Foreclosures is an extremely competitive niche. Since these homes are priced so low, foreclosures usually get snapped up quickly and often create over bidding environments with so much competition. Whenever you’re looking for a Bank Owned home, be prepared to make offers exceptionally fast to compete or have a chance. That is, of course, if the property is worth it. Some Prescott Foreclosures hit the market priced too high and need time to drop in value from the bank.
- Improvement Investment: Bank owned properties are sold as ‘as-is’ sales and the bank will almost never make or offer repair costs. Since the previous owner is usually long gone, you don’t receive a ‘Seller Disclosures’ of know issues the home may have had. Often times, these homes have been sitting vacant for awhile with no required upkeep or maintenance. Investing in a professional home inspection should be common place and represents the main investment for going forward with an REO home, in my opinion. This way, a person can go in with his or her eyes open to what repairs will be needed and priced into their bottom line for the home improvements / investment.
- Neighborhoods: Checking the community statistics you may see large amounts of Bank Owned homes come from areas higher crime rates. This can have negative effects on resale value and whether or not this is a sound investment for you.
- Unknown Costs: Having a good Realtor and Title Company should help anyone with this. However, there’s always the chance of a lien these types of properties. Proper research should be handled to avoid finding yourself in the position of paying the previous owners debts.
- Value of Time: Purchasing a Bank Owned property can be a daunting and time-consuming process. Go in knowing there will be a lot of required paperwork and red tape to get through.
- Slow to appreciate: Depending upon the deal you worked out, compressed markets can take some time to bounce back. Even though you may have invested time and money into capital improvements in the home, often times these improvements don’t have the best return on investment. Bank Owned homes can push down market values in communities and buying in those areas may take longer to get the proper appreciation. Luckily, here in quad cities of that includes areas like PV, Chino Valley, and Dewey-Humboldt we don’t see this concentration of homes weighing down any neighborhoods riddled with high foreclosure rates.
Predator Search for Prescott Foreclosures
Today finding a great deal on a foreclosure investment is more difficult to find and the real estate market is always changing. To be on top of these properties you need to be a savvy investor ready to move on the right listing. This includes gathering data fast and having all your systems in place to turn the property quickly. The days of going to the local courthouse are less needed with the use a trained professional who can locate Bank Owned listings for you. Basically, putting your business on co-pilot. If you’re looking to put your business on co-pilot and receive property updates daily try my Predator Search feature. This service is offered for FREE to anyone who uses my services as his or her Buyers Agent. To find out more, please contact me to get started or try your hand at my Advanced Search feature here:
Donny Karcie, MBA / RE/MAX Mountain Properties
731 W Gurley Street, Prescott, AZ 86305
Google + https://goo.gl/8SzGme