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Thursday, June 03, 2010

A Foreclosure in Perfect Condition – Does One Exist?

The foreclosure in perfect condition? Is there such a thing?  

There can be a major difference between a short sale property and a foreclosure property.  Many buyers – except experienced investors – do not understand the differences.

In many short sales the home owner is still living in the property.  They are attempting to sell for less than they owe (thus the term “short sale”) and want as much as they can get for the property.  It is not in their best interest to “give it away!” They may be held liable for the difference between selling price and monies owed. 

A foreclosure (also known as bank-owned or REO) has been through the foreclosure process.  Most often the owner did not have the financial means to handle maintenance and upkeep or chose to not make repairs.  In some cases the property has been stripped of appliances, AC units, garage door openers, even the cabinets in some cases!

Foreclosure properties are discounted because the buyer will likely have to invest real money immediately to rehab the property. [Some short sales have been similarly defaced.]

Some foreclosures are what is now being termed as a strategic default.  The owner has seen the value diminish so much that they have decided to walk rather than be upside down in the mortgage.  This is a real option for some - and I can understand. It is these strategic default properties (some short sales, some foreclosures) that are likely in the best condition.

But finding a foreclosure in perfect condition is a myth – much as Sasquatch or the Loch Ness Monster.

Looking for a short sale in Viera, Suntree, Melbourne or Rockledge, Florida?  Call me at 321-693-3850 or email me.

©Gary L. Waters, PLLC, Florida licensed real estate agent, Century 21 Baytree Realty, Rockledge, Florida.

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