Short Sales, Foreclosures, REO - Myth or Magic?

Short Sales, Foreclosures, REO – Myth or Magic? (edit/delete)
Short Sales, Foreclosures, REO - Myth or Magic?



It seems that everybody I speak with these days is looking for "distressed properties". Having been involved in the distressed market since 1988 and having bought and sold dozens of them over the years both for my own account and for those of clients, I consider myself fairly well versed in the market.

There have always been distressed properties available on the market but, in the past, nobody wanted to consider them. Now we find ourselves in a situation where there are truly more buyers than there are saleable properties. I say this because not every potential short sale will be a short sale and not every foreclosure will be available at a below market price.

For my interests, the best time to purchase one of these properties has always been BEFORE the sheriff's sale, when dealing directly with the owner. The increase in distressed properties today has mostly been from people who bought their homes in recent years, at inflated prices and have no equity left in the property. So the job today becomes convincing the bank to accept $200,000 on a property on which they loaned $275,000 just three years ago and now have $350,000 in debt. It's possible but, it's a long hard fight to get there.

There is another segment of the market today that is a much easier place to find good values; the properly priced market. There are motivated Seller's who want to move, for one reason or another, and understand the current market conditions and price accordingly. These properties can be purchased with little difficulty, at attractive pricing and are usually in a good state of repair.

As a Buyer searching for a home of their own, this seems like a far more attractive proposition - a good home, in good repair, clean and well priced, than the struggle that is involved in the myth of distressed properties.