The State of our Market... Part Four

Now, what about these foreclosures that we keep hearing about? It is everywhere, isn’t it?! We hear about it all over on the news, and it seems that we should all be able to get a great deal if we can just sniff out that one fabulous foreclosure.

Let me give you a few facts about foreclosures.
1. While there may be lots in other areas, we don’t have that many here. In talking with the owner of one of our local title companies, he said that of all the homes that were closed by them last year (and there were hundreds), only 5 turned out to be that true foreclosure. There are just not that many of them.
2. Foreclosures, unless they are the RARE ones that go to the courthouse steps where you bid and pay CASH (no loans are accepted!) at that exact moment to get a house, are priced at FAIR MARKET VALUE. They are listed just like every home on the MLS. The banks are not giving them away. In general, you are going to pay the same amount for a house owned by the bank or owned by a person for the same price. The word “foreclosure” is NOT a code word for bargain.
3. The purchasing process can be filled with twists and turns, and the banks are the ones who WILL win. We just had an offer on a house that was accepted. The next day, even though we had a legally binding contract on the house, the bank took a different offer and our buyers were left in the cold with no recourse. The banks always get their way, and it is a frustrating process for the buyers.
4. It is the same deal with short sales. A short sale is when a home is offered for and sold for less than what the bank is owed. We are seeing these in the Valley, and again they are tempting. However, the banks continue to be in control and are certainly not interested in you or the seller. They just want the most money.

I know that it is tempting to hear all about foreclosures and that friend of a friend who got that great deal … but I am telling you that most of that is simply not true. It really is wise to find a good agent to help you find the right house at the right price for you, whether it be an owner-owned, short sale or foreclosure. Look for the right house, not the title on it.