Foreclosures – The Real Story

As a Realtor in Las Vegas, I get a lot of questions on foreclosures these days. The most common are:

• Do you sell foreclosures?
• What price ranges are available?
• How do I find foreclosures?
• Can I get great property at bargain basement prices?
• Are they a good deal?

First, the easy ones:

“Do you sell foreclosures?” Yes – any agent can sell foreclosures.

“What price ranges are available?” I just checked the MLS (1/18/2007) and there are hundreds of properties listed as “Foreclosure Commenced”. The prices span from $134,000 to $1,400,000. So, all price ranges are available. There are many more that are bank owned and not listed as “Foreclosure Commenced”.

“How do I find foreclosures?” Contact me or any other Realtor. Most are on the MLS if you know how to search.

“Can I get great property at bargain basement prices?” – Foreclosed homes are frequently offered at well below the market price for similar homes in the area. But, are they a good deal? See below.

Now the hard question. “Are they a good deal?” This is the real question. I am not an expert on foreclosures but I have shown 40 or 50 and I can make some generalizations:

• Almost all were in horrible condition; sometimes bordering on frightening. Depending on the individual home, my guess is that most would require $20,000 to over $100,000 to restore them to livable condition.
• Some are priced sufficiently low that you could restore then and come out better than purchasing a home in the same neighborhood in great condition.
• Most of the foreclosed homes are not in premium neighborhoods or areas. The logic behind this is simple: if you had a great home in a great area, you would have sold the home rather than have it foreclosed.

So, are they a good deal? That depends. If you are knowledgeable in construction, you have upfront cast to invest in restoring the home and a place to live for a month or two while the restorations are made, then yes the right foreclosed home can be a great deal. However, I think that there is a better way for most people.

There are many homes for sale at below market prices which are not in foreclosure and are in great condition. Why these homes are selling at low prices does not matter. All that really matters is that they are available. These homes are usually in good condition and you can move right in without major repairs. Are they at as good a price as foreclosed homes? In many cases, yes. For example, if the “market Price” of a specific model of home in a neighborhood is $400,000 and you have two homes you could purchase:

• Home 1: Purchase price of $360,000 but you have to spend $30,000 and live somewhere for two months while the repairs are made and go through all the contracting hassles.
• Home 2: Purchase price of $375,000 and you can move in with no major repairs.

I would choose home 2; I think most people would. Are such good deals easy to find? No. They take me time and effort to locate such deals. However, if your agent doesn’t save you money and time by finding you good deals, what is their value? You need to keep in mind that when you select anything based primarily on one criteria (for example: price) you have to be more flexible on other criteria (size of lot or number of bathrooms).

Summary: As with everything else in life, if anything looks too good to be true it usually isn’t. Foreclosures make sense if you select very carefully, have the upfront cash, skills and time to restore them. For most people, I think you are better off finding great deals on homes which are not necessarily in foreclosure.

Looking for a great deal on a new or resale home? Contact me today.

 

Eric Fernwood

RE/MAX CENTRAL
8400 W. Sahara Ave
Las Vegas NV 89117
mail: Eric@ISellLVHomes.com
Website: www.ISellLVHomes.com
Phone: 702-358-8884
Fax: 702-202-2020

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