Some Pros and Cons of Buying Properties through Bank Auctions
Banks make profits through lending and not through selling real estate properties. That is the job of real state brokers. Hence, it is not surprising why foreclosed properties are very inexpensive that on average they may range from 80 to 20 percent of the original price before foreclosure. Of course, the prices vary depending on several factors such as location, condition of the property and the remaining mortgage balance plus interest yet unpaid. In most cases, however, banks simply want to liquidate the property as soon as possible that they sell it at very low price. Selling the property is usually done through auctions.
The main advantage of bidding on foreclosed homes or properties is the very low price. Some are even sold below the tax assessed value. While the demand is low, the value of these properties is also kept low, but the economic climate is changing. The properties will soon become less affordable but more in demand. Whether you simply need to own a home for your family or you want to invest, now is the best time to buy while the prices are still at pre-market boom levels. The property bubble might have already burst but the prices are now starting to stabilize as the economic situation improves.
There are still areas wherein the value of properties is very near the post-subprime meltdown value. Investing in very inexpensive reo properties is an opportunity that may soon pass for small scale property investors in the United States. Aside from the improving domestic economic situation, there is also the increasing foreign competition in buying US properties. For those who have the money but still hesitating to invest in foreclosed properties, the door of opportunity is already starting to close. It will not be too long before property prices are again propped up by market forces and economic fundamentals.
The price recovery trends of real estate properties, however, vary depending on several factors such as locations. There are cities, states and counties wherein the price recovery rate is low. The business and job opportunities in a particular area also have very significant effect on the market price of properties. More often than not, the property value is also indicative of the opportunities available in an area.
The main disadvantage of buying properties through bank or government auctions is that a would-be buyer will not have much chance to inspect the property. The degree of damage might be severe that greater expenses will be necessary to renovate the property. A would-be buyer might overshoot his or her budget. Hence, it is very important to first do some background research on the property before bidding. Aside from the physical condition of a foreclosed home, it is also important to know the situation of the community. Social factors such as high crime rate can affect the market value of properties. Convenience in terms of distance to work place, shopping centers and schools is also very important when you are searching for best value properties.
The main advantage of bidding on foreclosed homes or properties is the very low price. Some are even sold below the tax assessed value. While the demand is low, the value of these properties is also kept low, but the economic climate is changing. The properties will soon become less affordable but more in demand. Whether you simply need to own a home for your family or you want to invest, now is the best time to buy while the prices are still at pre-market boom levels. The property bubble might have already burst but the prices are now starting to stabilize as the economic situation improves.
There are still areas wherein the value of properties is very near the post-subprime meltdown value. Investing in very inexpensive reo properties is an opportunity that may soon pass for small scale property investors in the United States. Aside from the improving domestic economic situation, there is also the increasing foreign competition in buying US properties. For those who have the money but still hesitating to invest in foreclosed properties, the door of opportunity is already starting to close. It will not be too long before property prices are again propped up by market forces and economic fundamentals.
The price recovery trends of real estate properties, however, vary depending on several factors such as locations. There are cities, states and counties wherein the price recovery rate is low. The business and job opportunities in a particular area also have very significant effect on the market price of properties. More often than not, the property value is also indicative of the opportunities available in an area.
The main disadvantage of buying properties through bank or government auctions is that a would-be buyer will not have much chance to inspect the property. The degree of damage might be severe that greater expenses will be necessary to renovate the property. A would-be buyer might overshoot his or her budget. Hence, it is very important to first do some background research on the property before bidding. Aside from the physical condition of a foreclosed home, it is also important to know the situation of the community. Social factors such as high crime rate can affect the market value of properties. Convenience in terms of distance to work place, shopping centers and schools is also very important when you are searching for best value properties.