Foreclosure Frenzy
I’ve been laying low for a while now with respect to buying and flipping foreclosure properties. You might think that I’m nuts because everywhere you turn now you see and hear about the parabolic rise of foreclosures in this country and the end of the RE world.
Although foreclosure activity has picked up and more houses are now being repossessed by banks, I still haven’t smelled enough blood and desperation out there yet. If you scan your local Real Estate Wanted section on Craigslist.org and search for either “short sale” or “foreclosure,” you’ll see Realtors hawking properties in foreclosure, pre-foreclosure, or subject to short sale approval. Then you look at the prices and notice that they’re not that much cheaper, they’re all at roughly current market value.
What I believe is happening is that Realtors are pulling out a new set of sales tactics aimed at the CNN home buyer reader. Mr. and Mrs. Homebuyer is probably thinking they’d get a killer deal in this market if they 1) find a foreclosure property that 2) happens to be their dream house. Throw in words like “Short Sale” or “Subject to bank approval of Short Sale” and you have the makings of sizzle and financial drool.
Based on experience, you won’t be getting a “deal” if you buy from those Realtors. The right and hard way to invest in/buy foreclosures is to hit the streets, do your own due diligence, mail out postcards, knock on doors, etc. It’s through that hard work that you can find those 60% off market value properties in questionable parts of town. If a Realtor says he/she’s got a foreclosure property, chances are the owners listed it with them so the bank would give them a break to try and sell it first.
Buyer Beware!