Let’s be honest. Given the real estate conditions we’ve experienced over the past several years, buyers today always want to make sure they are getting “a deal”. But what people considered deals a couple years ago (20 – 30% off the list price) are not necessarily still out there because sellers have adjusted their asking prices down so much. And because of that, we are selling a lot closer to the asking price these days than we have in the past, leaving some buyers feeling like they can’t get “a good deal” anymore.
However, foreclosures and short sales continue to be great opportunities for people who really want a good deal AND have the patience to deal with them. Foreclosures are properties that are owned by banks, in which the owners have been evicted for failing to pay their mortgage over a period of time. So the parties involved in a foreclosure sale are just the buyer and the bank. Short sales are properties still owned by individuals who owe more money to the bank in mortgages than the home is worth. For example, they might have a $300,000 loan, but can only sell the house for $200,000. Short sales are a lot trickier than foreclosures because not only does the seller have to approve an offer, but the bank that holds the mortgage does too. Once a contract gets accepted, the bank then does a thorough analysis to ensure that the seller really can’t afford the home and the payments, and also makes sure that the offer on the table is a good one. It can be extremely difficult and time consuming to get through all the details.
Foreclosures have often been left empty for several months as owners have been evicted, and there’s a lag time from that point to the point the listing hits the market. So general upkeep and maintenance falls behind during that time. With owners facing eviction and dealing with their anger, they also are sometimes missing appliances, and in some cases, other things such as doorknobs, air conditioners, and I’ve even seen baseboards stripped off of the walls! So while there might be an incredible discount off the fair market value, you also have to keep in mind that there is usually a decent amount of repair costs involved right after the closing to bring the house back up to normal standards.
Curious to know about foreclosures in your neighborhood? I pulled up a list of everything on the market in Coral Gables. There are currently 11 single-family homes and 15 condos. The condos range in price from $64,900 to $379,000 and the houses range from $259,900 to $857,900 with the most expensive house listed at $5,700,000 – a lovely open-waterfront home near Edgewater Drive! Some of these are exceptional opportunities, and I’d love to talk to you about them if you’re interested in taking them on!