This is a recurring theme from almost every buyer that contacts me. The interesting thing is that as a buyer’s agent, the best deals I am seeing are not distressed sales but deals where the seller’s have realized they are competing with foreclosures and have dropped their price to match. REO and foreclosure homes are usually in terrible condition, and let’s face it, this is a property that didn’t sell when the tough times befell the last owner.
Let’s look at a real life example of this in action. This property was listed as a fannie mae foreclosure and it was hot hot hot. Everyone was rushing to see it, and it was located in a very nice condo project known as the Breakers. The unit had been terribly painted, and the color scheme was quite bad. There were mirrors missing in the bathrooms, and it probably needed $3500 of repair and remodeling. It was also unfurnished. It was purchase for $154,000.
Now look at this Breakers unit I just recently sold to a buyer that was bought for $147,000, fully furnished, in immaculate condition, including all electronics, a boat hoist, towels, bed linens, totally turnkey and in A+ condition. I’d have to say that not only did this one not need the additional $3500 to be spent on repair, it had an additional $10,000 to $12,000 of value the other lacked. That is around $22,000 difference in the two!
Condo sold by John Garrett
So don’t be too quick to think that foreclosures are your guaranteed best bet in this buyer’s market. Many seller’s have adjusted their prices using sold foreclosure comps, and these seller’s will be the first to sell. Don’t fall for agents offering “A free list of area foreclosures” thinking it puts you ahead of the game. Hire a Buyer’s Broker and look at all MLS properties, you might find the one you have been waiting for!
