Short Sales & Foreclosures - Finding That Deal Of A Lifetime...Or Is It?

In today's market, many buyers feel that they want to get the deal of a lifetime.  There has to be a short sale or foreclosure out there that has their name on it and is at that bargain basement price that they can pick up for a song.  Surely you have heard the stories?  Homes selling so far below what they are worth it will make your head spin!

Well there is another side of the story!  Certainly there are some deals left to be had, but most of the "good deals" are snatched up before they hit the MLS.  Buyers are lined up and ready to pay cash. It is just a mere formality that some of these deals hit the MLS, because it may be part of the process.

Short sales and foreclosures or bank owned properties are not for the faint of heart. A distressed property is just that, distressed!  In the short sale process, the bank agrees to a sale below the loan amount that is due to the investor. This is oversimplifying it a little, but the point is that buying a short sale may not be the great deal you think it is.  You always have to remember that in most cases, the home is going to go for what the market will bare.



The home owner is under-water on the home. This generally means that they are not getting anything back when the property sells.  Like the house above, the short sale or foreclosure may be in disrepair because the home owner does not want to sink any more money into it.  Chances are they can not afford to put money out for general maintenance.  This means that areas such as plumbing, electrical, home appliances may be broken or in need of replacing.

Some distressed property owners are so upset about the situation they are in, they cause deliberate destruction.  The house may be decaying because of lack of paint and termite damage.  Hidden costs can add up. In most cases, you cannot rely upon disclosure to find out about the details.  Why?  The home owner may already have moved out causing the bank to take the home back.  The bank is not obligated to disclose any problems unless they have lived in the home.  So it is up to you to make sure you are getting the best deal possible.

As you may already know, there are properties that may not sell for other reasons, such as an unreasonable or difficult seller or the home was put on the market at the wrong time and wrong price. Don't forget that you may be dealing with a third party who is the investor (bank).  They have the final say during the sale.  This is all business to them.  There is no emotion and you may not have the leverage you anticipate.

Make sure you get a good and accurate inspection and have a calculator handy so you can figure out the hidden costs.  If major repairs are necessary, you will need a licensed contractor that you can trust who will not gouge you.

The old saying "If it looks to good to be true, it probably is" may apply on a distressed property. Be ready to walk away. The "deal of a lifetime" may become a lifetime of nightmares and expense if you are not careful. Remember that movie "The Money Pit"!

When Will Home Prices and the Real Estate Market Rebound?

Consumers want to buy but are waiting for the right time

This article was taken from our Market Leader website at www.esedonahomes4sale.com.  You can see this article and many others at "Insider Tips".  

A survey released this week by Hanley Wood shows that recovery is still evading the U.S. housing market. Consumers are in no hurry to buy a home even though they believe in homeownership as well as the significance of a healthy housing market in aiding economic recovery. “We thought people would be soured after watching home values fall, but instead we found the typical American still places high value on homeownership,” said Frank Anton, CEO of Hanley Wood in a release.

The media and data research company polled about 3,000 homeowners and renters in June and more than 68 percent of respondents believed that the time was right to buy a house. But, their belief and wishes were dampened by the realities of today’s economy, the survey found. Unemployment, strict lending practices and an uncertain future continue to take its toll on consumers. “As long as buyers are uncertain about what’s happening in the economy and where house prices are headed, they are going to be slow to move. There is no urging the market,” Kent Colton, a senior fellow at Harvard University’s Joint Center for Housing Studies told Reuters. There is a silver lining though. The survey found that 29 percent of renters and 19 percent of homeowners are considering buying a home in the next two years. Those numbers mean an upward of two million potential buyers are waiting for the right time to plunge into the market.

Now that could definitely be a game changer.

Home Prices May Not Climb Upward Soon

Without an aggressive and creative solution, home prices will not pick up and aid in economic recovery, according to new forecasts. Home values will continue to fall for years, says a poll conducted by the Professional Risk Managers’ International Association for research firm FICO. The poll conducted among industry experts found that bankers expect delinquencies on consumer loans to rise, underwriting to be stricter. They also expect the housing market to continue to struggle for a while. Forty-nine percent of the respondents said they don’t expect home prices to touch 2007 levels before 2020. Mortgage delinquencies will remain at a high for at least another five years, an overwhelming 73 percent of respondents said. The findings indicate that more needs to be done to aid the housing market toward a speedy recovery. Aggressive steps toward creating jobs is not a good enough catalyst for rejuvenating the housing market. Also, the never-before-seen low mortgage rates are good, but they are doing little to help the market when lenders are following strict lending guidelines.

Sedona Market (86336) Is Very Active

 This chart is reported from Market Leader at Market Insider

Normally the market slows this time of year in this resort community. As a realtor, it is a good time to take a vacation. However Sedona buyers are actively pursuing that second home, vacation or retirement property. Properties are moving and new home construction, which has been completely dormant is on the rise. On two streets here in Sedona there are 4 homes being built and one just completed! These are very good signs!