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Are Short Sales and Foreclosures A Good Deal?
April 3rd, 2007 categories: Foreclosure, Home Buyer, Real Estate
As a Realtor, this past weekend I showed a real estate house for sale which is in short sale to a prospective Home Buyer in Granite Bay, CA. First, if you dont know what a Short Sale or Foreclosure is now is the time to become acquainted with the terms by clicking on the highlighted and underlined links.
It is important to know what a short sale and foreclosure is in real estate before ever buy a house in short sale or foreclosure. This will save you a lot of headache and money. As a home buyer the more you understand, the better.
This house which is listed in upscale Granite Bay, CA for sale, at $1,119,000 was originally listed for sale for $1,340,000 and has had three different Realtors try to sell this property. It now is listed as a short sale and the listing agent indicates that the Lender is willing to take $1,119,000 for this 4,477 square foot home. At first glance a buyer would think that this is a sweet deal in real estate.
Now, that may seem to you, as a Home Buyer to be a heck of a deal. At first glance this house would appear to be a great buy reduced a whopping $275K as advertised in a fabulous area with Lender approving $1,119,000 offer.
However, the first thing your Realtor (if you have one that knows), should do is take a look at the surrounding area and produce a CMA (comparative market analysis).
Actually, in this case it doesnt take much work to see that within walking distance there is a home built by the same builder, in the same neighborhood with the same square footage for the same price. One difference between these two properties is that the one for sale that is not in short sale, is pristine, located in a court, bigger lot but doesnt have a pool. The house in short sale, on the other hand, for the same price is thrashed both inside and outside, with a pool that is green with possibly major problems. Deal or No Deal?
I wish I could share a photo of both properties for you but they are not my listings. You will just have to believe me when I tell you how horrible the house in short sale looks both inside and out. This is a Granite Bay real estate nightmare as well as a neighborhood nightmare.
Now, either the Lender is out to lunch and/or the Realtor is out to lunch on pricing this short sale. I realize that the loan amount on this short sale house is $1,399,000 but believe me, when I say that the house is not worth $1,119,000. Especially, when you can go just a mere few feet to a court and buy the same floor plan that has been properly maintained, pristine and has a larger lot with both inside and outside being impeccably maintained. You would have to be insane to buy this Granite Bay home for sale in short sale. And as time goes on this Granite Bay, CA short sale home for sale will only continue to deteriorate and become an even bigger real estate eye sore.
So, Home Buyers beware of short sales. Just because the house is a short sale or a foreclosure does not mean that it is worth what you are paying. You need to have good representation and know what you are doing when buying a home. If you dont have a knowledgeable Realtor, you might end up with a money pit!
Short Sales and Foreclosures in Real Estate are not always a DEAL in fact, more times than not, they are the new home buyers worst nightmare that paid too much. Remember, you are much better off being able to negotiate with a Seller who has equity than you are with a bank that has a large loan on the property.
Related Articles:
Foreclosures, Buy or Dont Buy?
Home Sales for Placer County California by City for January 2007
Granite Bay California An Upscale Community
Granite Bay California Overview
[...] Unless you are dealing with a Realtor who pays monthly for the ability to search listing and belong to their Real Estate Association, you are not getting the full capacity and up-to-date MLS homes for sale. And meanwhile the predators continue to attract home buyers…but we already know that there are a lot of predators. We are seeing the results of some of them right now, with the Short Sales and Foreclosures. There are many faces to predators and it’s time the public start identifying them. [...]
[...] Are Short Sales and Foreclosures A Good Deal? [...]