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Buying Foreclosures (Bank Owned Properties)Due to the unusual number of foreclosed properties on the market currently, many buyers and investors are taking advantage of the near "give-away" prices in many areas of the country. Areas that became over-built during the frenzy of 2004-2006 now have the most foreclosures--many now priced at 50% of their value at the peak of the market. In our area of Florida, the "Treasure Coast," with major towns of Stuart and Port St Lucie, savvy buyers can choose from bargains in the following categories: 1. Condominiums in well-kept, beautifully manicured communities that offer heated pools and other amenities. They are conveniently close to shopping, restaurants and beaches. Many are available for less than $100,000. 2. Single family homes in Port St Lucie. This city has an abundance of vacant, foreclosed properties that are less than five years old. These three and four bedroom homes are concrete and stucco construction, and are built to the latest building code with regard to storm damage. Most bank asking prices range from $90,000 to $150,000. Most are located on standard lots that measure 80 x 120 so they have room to add pools in the back yard. 3. Homes in gated communities in St Lucie West. Not that many homes were bought with little or no money down in this type of community, so we don't see a lot of foreclosures. We do see motivated sellers who have reduced their asking prices by $100,000 or more. Some of these communities offer glamorous clubhouses with fitness centers, card rooms, billiard rooms, saunas, resort style pools, etc. Two and three bedroom single family homes range from $150,000 to $300,000. 4. Single family homes in planned communities in Stuart. While there is a smaller supply of homes in Stuart, we have been able to help buyers purchase three and four bedroom homes, some less than five years old, for less than $225,000. Martin County boasts one of the best school systems in Florida and prices run higher than neighboring St Lucie County. 5. Golf community homes. Golfers can purchase two and three bedroom homes with garages starting as low as $150,000 in communities where there is no obligation to join (or pay for) golf. Golf is optional for the daily green fee. Sellers have dropped their asking prices from $100,000 to $200,000 in many cases, depending on the size and price range of the properties. What Do You Need to Know about Buying a Foreclosure? First of all, realize that you or your agent will be dealing with the listing agent, who, in turn, will be dealing with a bank asset manager-- who normally has not seen the home, only photos and a brief description of the property. Since this asset manager may be in charge of disposing of hundreds of homes, he has no particular interest in the home you wish to buy. He is only interested in getting a certain price for the home. Realize, also, that after you have selected the home you want to purchase and are ready to submit an offer--there may be other offers on the same property. You and your agent will not know what the other offers are, so you may only have one shot at buying the home. Typically, when there are multiple offers on a foreclosure, the asset manager will give all buyers a chance to submit their "highest and best" offer. In some cases, the offers exceed the asking price by a small amount. This should be of no concern to a buyer who is getting a home at a bargain price. Buyers should rely on an experienced Realtor who is representing the buyer--not the bank--to know whether the home is a good value or not. Realtors who represent buyers are called "buyer's agents," or "buyer's brokers." Don't buy any property just because of a low price. If you plan to rent it, there has to be a demand for that type of rental. If you plan to repair and re-sell the home, there has to be a market for the repaired home at a price significantly higher than your purchase price. If you plan to live in the home, it has to make sense for you or your family in terms of size, location and number of bedrooms and baths. Asset managers want to know that you are qualified to buy the property. If you are getting a mortgage, they won't look at your offer without a "pre-qualification" letter from a lender, so you need this letter in hand when you start looking at homes--you could get lucky and find the right home the first day! If you plan to purchase with cash, you¿ll need written proof that you have the cash in the bank or other account. Your monthly statement (with your account number blacked out) is sufficient in most cases. Either a pre-qualification letter or proof of funds must accompany any offer you submit. Once your offer has been submitted, your agent will normally get a verbal response from the asset manager either accepting your offer or giving you a counter-offer within a few days. You can then accept the counter-offer or just improve your original offer. Once a price is agreed on, the asset manager will forward a standard addendum to the contract that makes it clear that the bank has limited knowledge of the property and are selling it "as-is. Bank foreclosures are normally sold "as-is." This means that the bank will not make repairs--unless they are required by your mortgage holder. For instance, if your mortgage requires a clear termite report and your inspector finds that there are termites in one area of the home, the bank may pay for extermination and repair of the damaged area. After all documents are signed by you and by the asset manager, you will have an inspection period (normally about seven days) to have the property inspected. During this period, you can opt out of the contract if you find that the property needs more repair than you thought. In this case you will get your deposit back and can start over with a different home. After you have completed your inspections and after your lender has approved your mortgage, you are ready to close and move in. The only problem is this--asset managers tend to send all of their business to one law firm in each area of the country. This law firm may be up to their ears in foreclosure closings, and your closing may not occur on time, so be flexible regarding the closing date. It could be as much as two weeks later than the agreed on date, and there is nothing you or your Realtor can do about it. There won't be any penalty for you, if the delay was not caused by you, and none of your costs (mortgage, insurance, utilities, taxes) will begin before the actual closing date. This "window of opportunity" for buying foreclosures at a fraction of their real value won't last forever. New home construction has nearly stopped in our area, so the inventory of bargains will disappear--perhaps sooner than you think. Consult a buyer's agent who can show you the best values in your area. If you're serious about buying a home in our area (Hobe Sound, Stuart, Jensen Beach, Port St Lucie, Sewall's Point, and Hutchison Island), please give us a call to let us know your requirements, location preference, and price range. We can then find the very best values and make arrangements to show them to you. We won't waste your time showing you homes that do not meet your requirements and budget, because we don't wish to waste to time either. Depending on your requirements, the best available home for you may be a bank owned property, or simply a motivated seller. Either way, we'll be happy to represent you--the buyer--and protect your best interest al the way through to the closing. If you choose to have us represent you, you will not pay us any fee. Real estate commissions are paid by the seller. Gary and Nancy Gregg Remax of Stuart 772-288-5161
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