According to a recent report by RealtyTrac, a firm specializing in the tracking of foreclosed properties in the United States, there are about 20 metropolitan areas where there are some of the best opportunities to buy foreclosed properties.
"There are many opportunities not only for investors and for normal homebuyers, but it is necessary to learn about and research these opportunities," said Daff Blomquist, Vice President of RealtyTrac.
According to the RealtyTrac report, "the markets in the different metropolitan areas are improving slowly, and the foreclosures are still increasing. This means that there are still opportunities for buyers interested in properties that can be purchased at a high discount compared to the market prices of those areas.”
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The crisis of embargoes or foreclosures has been subsiding in recent months but has not ended completely. According to RealtyTrac, in 2018, property foreclosure activity increased by 57% compared to 2017 in the main 212 metropolitan areas of the United States. But the crisis is on track to be overcome because foreclosure activity fell by 85% in 2018 compared to 2010, the year in which the highest point of the crisis was reached.
But, how do you buy real estate in South Bay or any other area in the country that is foreclosed? The following are the main considerations to take into account:
Auctions for foreclosed properties offer tremendous opportunities to acquire properties, but the risk is very high. The buyer must make offers for properties that he cannot analyze thoroughly. In addition, buyers must be prepared to pay for the property on the day of the auction. This type of purchase is not made with financing or mortgage.
Another option is to look for pre-foreclosure properties and make an offer directly to the owner. This in many cases is considered a short sale (short sale), and it will be necessary for the bank that has the mortgage to approve the transaction because in most cases the value offered by the property is lower than the debt or the mortgage.
You can also buy foreclosures directly from the banks and make an offer for the properties (bank owned) that are available for sale. These properties are usually those that were not sold at auctions.
According to RealtyTrac, a good opportunity occurs when the value of the property in foreclosure is priced at a discount of between 20% and 50% against the market price of a similar property that is not attached. This situation is occurring in some metropolitan areas in New York, New Jersey, California, Florida, Texas, and Connecticut, among others.
To investigate thoroughly, it is essential to investigate potential property problems such as foreclosures for non-payment of property taxes or second mortgages. All these could be serious problems that would turn a property into an economic burden for the buyer. Blomquist suggests hiring a professional company such as Casa Bella Properties to thoroughly investigate potential problems the real estate in South Bay and other areas may have.