One of the most common questions that I get is whether foreclosure homes are still a good bargain. A foreclosure home, also known as an REO (Real Estate Owned) in legal terms, is a house that has been foreclosed on by a mortgage lender and that is now owned by the bank. Banks are not in the business of owning houses so they are motivated to sell them quickly if possible.
In order to do this, they historically would try to sell them at a discount. Also, because homeowners did not usually take care of their homes in the months preceding the foreclosure sale, they had no incentives to take care of them or make repairs. In fact, in may instances, home owners would even intentionally damage the home out of spite to the lender.
When the economy took a downturn and the real estate market crashed several years ago, there was a very high number of foreclosure homes available. Because of this high inventory, banks were selling them cheap in order to get rid of them. Many of these were also in bad shape, which further added to the cheap prices. They were a fixer-upper’s dream.
But today, with the strong economy and low inventory of foreclosure homes, prices are not the bargains that they once were, and banks have less of an incentive to sell them for the big discounts. And in some instances, the banks are actually entering the house and doing some basic renovations to get the sale price back up.
The bottom line is that foreclosures can still be a bargain if you look hard enough and have the desire or ability to do some repairs on the home. However, these homes are not the bargain they used to be. If you are looking to buy a home and don’t mind putting a little elbow grease into it to fix it up, then I would encourage you to find a list of foreclosure homes during your search.
For a current list of foreclosure homes in the Orlando area click here. For any other questions on foreclosures, or the legal foreclosure process, you can call/text real estate broker and attorney at law David Dowell at (407) 864-2265, or by email at david@PanAmOrlando.com.
