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How to Spot a Good Real Estate Deal - Foreclosures Aren't Always What They Seem

Posted by Breckenridge Associates Real Estate on Thursday, April 8th, 2010 at 8:03pm.

Most homebuyers in search of a home automatically assume buying a foreclosed property means they’re getting the best deal out there. However, this often isn’t the case. Purchasing a foreclosed property truly can be a great investment, but it could also be an eye-opening experience for those not aware of the process and problems that can occur along the way.

Fortunately, from a property-value standpoint, we have not seen significant growth in the number of foreclosures locally as many other markets have experienced. Out of 26,765 properties in Summit County only 47 sold as foreclosures in 2009*. Unlike many areas, Breckenridge has a high number of cash transactions. This coupled with a healthy rental pool and a stable tourism-based economy, has surely helped to keep foreclosures in the area to a minimum. That’s not to say there aren’t great opportunities. There are, however you have to stay on top of the local real estate happenings in the area not to miss out.

One of the reasons a foreclosure may not be as good of a deal as it appears to be on paper is that distressed home sellers may have more debt than just their home mortgage. They may have loans or a lien against their property, which the bank could factor into the sale price. Another issue could be the amount of work and repair needed on a home, if the sellers had stopped maintaining it, for example. A home may sit vacant for months, which could be problematic in a winter climate such as ours, where bursting pipes can cause serious damage. Foreclosures typically take a lot longer to close on the sale, therefore buyers need to be flexible on their timeframe. Securing property prior to a foreclosure can mean the difference in having a move-in ready, beautifully furnished home versus a bank-owned home typically stripped of all its contents. Buyers need to be aware of these types of concerns when pursuing a foreclosure, but if the price is right and the home is free of these types of issues, purchasing a foreclosed property can prove to be a very wise decision.

Establishing a relationship with a knowledgeable broker and sharing what you are looking for up front will allow you to get a jumpstart on finding the best home for you. Knowledge of the local real estate market and access to a network of resources are invaluable in finding a great real estate opportunity. More often than not, in our local market, the best real estate deals are found prior to a property facing foreclosure. Being aware of new inventory before it hits the market, monitoring shifts in the existing inventory (i.e. price reductions) and the ability to act quickly are all key strategies. A reputable real estate broker will be able to offer insight on an ideal opportunity if it arises, as they’ll be in tune with a home’s value and current financial situation, both of which will help to determine the true value of the deal.

Our team of Realtors® is out in the local market every single day, networking with our contacts and working together for our clients so we can best represent their needs. Breckenridge Associates Real Estate’s “Home Town Team” has a proven track record and the longstanding success to best represent you. Contact your broker today to learn more about great deals in the area and how we can help you find your next mountain home, 800.774.7970 or 970.453.2200.

*Source: Stewart Title Company 2009 Foreclosure Data

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