What You Need to Know About Foreclosures and Short Sales
Foreclosures, short sales and bank owned properties (REO’s) are still quite numerous in many California housing markets. This has created a buying opportunity for many savvy investors and purchasers, however, due to the complex nature of these listings it’s highly recommended that you enlist the help of an experienced real estate broker.
Tim Leingang has spent many years buying and selling these types of distressed properties. He is constantly unearthing great information about where the opportunities are, how big they are, and how smart, capable buyers are leveraging the current market.
Who Should Consider this Type of Purchase?
First-time home buyers make up a large portion of all buyers of bank-owned foreclosures and soon-to-be foreclosed short sale properties. They’re followed closely by investors seeking rental properties, and a third important group—homeowners who find they can move up to a bigger or better home they previously could not afford.
The primary incentive is a potential buying opportunity that is well below market value. That’s instant equity! And, although these transactions are best handled by experts, in actuality, distressed markets demand most of the same things that ordinary property markets require. Of course, there are also many pitfalls to be avoided.
The following should be considered before getting started:
- MONEY: Buyers must be financially qualified and ready to buy. The best properties go quickly. Buyers must look strong to lenders.
- MOTIVATION: Buyers must be motivated to compete successfully. Tim urges buyers in this market to be clear about both their “motivating why” and their criteria for the property itself (size, location, condition, floor plan, etc.)
- LOCATION: Contrary to the rumors, prime buying opportunities exist in almost every neighborhood and price range.
- CONDITION: Buyers should understand that repair costs are not necessarily large. Tim’s Distressed Property Buying Survey shows the average cost to repair to be $5,000—that’s less than 3 percent of the median purchase price in the U.S. today.
- EXPERT HELP: Finally, smart buyers know they need to be even smarter. They will become a team with a local expert agent who knows local property, pricing, lenders, and the best listing agents. A strong listing agent can be a critical advantage in seeing a distressed property through from contract to close.
If you think you want to buy, have a talk with yourself first, check your financial readiness, and get with an expert and learn everything you need to know, in order to get what you want in this market.
Contact Tim today to learn more about short sales and foreclosures.