Friday, October 9, 2009

Foreclosure 101: They aren't the steal of a deal that Buyers think they are...

We sell a ton of foreclosures every year - last year approximately 375 of our listings that settled were BANK OWNED.

Because of our success in the Rozansky Realty Group with these properties - we get a number of referrals for Buyers who want to purchase a foreclosure. Now obviously the reason why they want to buy a foreclosure is because there is a misconception that there is instant equity when one successfully settles on a home that was foreclosed upon. Time and time again when meeting with a potential buyer for the first time, I try to explain that these homes are actually being sold for market value.

The banks are taking significantly losses on most of the homes that they now own and we sell. They are trying to net the most money from the transaction just like any Seller. The Asset Managers - employees hired by the Bank or Servicing Company - are not emotionally involved in the transaction. They don't care who buys the property, just as long as it settles (and preferably settles on time).

Now I can't speak for all of the companies out there - but from our experience it seems that most of the homes sell for around market value (what ever that is these days). There is a good opportunity on occasion for a buyer that intends to occupy the home to get a little sweat equity - but I don't see investors submitting offers in droves and able to flip the homes for double what they paid for it!

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