Are Foreclosures REALLY a good deal?

Are Foreclosures REALLY a good deal?



The Charlotte Observer January 23rd, 2011 edition posted a headline on the front page saying “Over half of 2010 home sales were troubled mortgages.” The New York Times January 25th, 2011 published an article titled “U.S. home prices slump again, hitting new lows.” This particular article went on to discuss how the long-predicted double-dip in housing is about to hit! All this gloom and doom news can be a good situation for anyone qualified and able to buy right now, making it a true “buyers market.”

In this economy, more and more real estate buyers are looking for a good deal… and there is a belief that foreclosures or bank owned properties are the best opportunities. Certainly, distressed properties (bank owned, short sales, auctions, foreclosures etc.) are priced below market or tax value in most cases, but that doesn’t necessarily mean they are the best deal. It all depends, for a lack of better words.

For example, a lot of home shoppers tend to look for homes that may just be outside of their price range. That home priced at $350,000 has exactly what you’re looking for! Granite, gorgeous cabinets, a huge back yard, big closets etc. However, it’s $50,000 out of the budget. The thought process, look for foreclosed homes that are in the $400,000 to $500,000 range, in hopes that it can be purchased within the budget (in this example $300,000 or less.) The problem arises when a buyer purchases one of these distressed homes at the top end of their budget; it leaves little cash for repairs, much less taxes. Often distressed homes are sold as is, meaning the seller usually is under water and has no money left to make repairs. Once a bank owns the property, in most cases they already are taking a hit on the price and therefore unwilling to spend any further.

So, if you’re a buyer looking for a good deal, be educated, be realistic, and hire a good real estate broker or Realtor to help guide you through the complicated processes of buying such homes.

Lake Wylie | Tega Cay | Fort Mill | Charlotte| NC | SC Mark McClaskey | is a licensed real estate broker and Realtor in NC/SC affiliated with Wilkinson and Associates.

704.604.5952 cell 704.504.5900 office

www.verusdelta.com