Foreclosures

Foreclosures are all the rage. If I had a nickel for every client that was looking for a foreclosure and "the deal" over the last 12 months, I would be very wealthy in nickles.

But, what most folks don't realize is that by the time the foreclosure hits the market, the ones left are really the third tier foreclosures.

First Tier:
The investors scour the legal organs (Publications) of the county and see who is advertised for foreclosure by the banks. Then, they literally knock on the doors of the ones they want and buy them pre-foreclosure using a variety of methods.

Second Tier:
The investors who buy them on the court house steps on the day of foreclosure.

Third Tier:
These are the ones that have been passed over by investors twice and left for the buyer's market.

So, deal?

Maybe, maybe not.

They generally need much more work than meets the eye. I had a call from a buyer earlier today who closed on their beloved foreclosure at the end of the year - you know deal of the century/we beat the system etc. They were super excited.

They finally moved in and started adding up the cost of everything that needs to be done - all the stuff I told them about 10 times. Kitchen renovation, bathroom renovations, new windows, new floors, new paint, new siding, gutters etc. Of course not everything needs to be done today. But, that's all expensive stuff!

What's so amazing to me about this market is that there are just as many investor owned properties that are priced just as low. And they have likely had a partial or full renovation!

Why is everyone so stuck on the word "foreclosure?"

Don't they realize that if they did not have the money to pay the note, they did not have the money for the house maintenance etc.? I'm not saying that all foreclosures are bad and all will cost money by any means. I'm just saying that there are lots of great deals out there. And more often than not, I think you can get a better deal if you drop that label.