Its been a few years since the foreclosures have started. And the real estate people advertise the homes as, search the list for foreclosures, save money, the real estate sign in front of the house says for sale, foreclosure. But I do not see a difference in price between a home that is foreclosure or one that is for sale because the owners just want to move to a different house for whatever reason. Why do the people in real estate do that?
Thank you!!!
I see quite a difference.
The deal is that the ones that are bargains are not so plentiful. Alot need so much that you end up at retail before you are done. Small margin.
[QUOTE=RichF;890390]Its been a few years since the foreclosures have started. And the real estate people advertise the homes as, search the list for foreclosures, save money, the real estate sign in front of the house says for sale, foreclosure. But I do not see a difference in price between a home that is foreclosure or one that is for sale because the owners just want to move to a different house for whatever reason. Why do the people in real estate do that?
Thank you!!![/QUOTE]
huh?
To Jack 5, why do the real estate people advertise it on the sign in front of the house as a foreclosure, in the advertisements it says have lists of foreclosures sent to you, but the prices are not any different between a foreclosure and the price if someone just listed their home to move. My question was, why do the real estate people do that?
The owner in foreclosure wants to avoid the property to be sold at foreclosure auction and trying to sell it before auction happened. The owners in foreclosure might try to save their face if they still have a hope. This situation has nothing to do with “real estate people” but with particular situation of owner in foreclosure.
Foreclosure homes for sale…
RichF,
You are saying houses in foreclosure are being priced at full retail price. I am not clear exactly who you are saying is advertising/selling - ‘the real estate people’ - but for my answer it doesn’t matter. Over the past 4 years, foreclosures/REOs/short sales were indeed priced significantly below retail, and there were bargains galore… It was a buyers market. However, the past 12 months or so, the market has changed. Fewer houses for sale, more buyers (investors beginning to move back into RE in bulk, and especially large institutional buyers), and the prices of the bargains have been driven significantly higher (while the retail prices have only inched up slightly). The ‘spread’ between foreclosure/REO/short sale prices, and retail prices, was huge for several years (conducive to flipping houses), but has shrunk significantly of late. IMHO, in the four years prior to this run up, there were bargains everywhere, and the trick to successful investing was finding the money to buy them. In the current market, bargains have become scarce, and money is getting easier to find, so the trick is shifting back to finding bargains again (conducive to wholesaling). One of the big keys to my success as a buy and hold investor has been to figure out what was happening in a given RE market (timeframe), and to focus on what would create the most value. Hope that helps.
Best wishes,
Chris in FL
Agree with Chris.
Beside if you watch foreclosure auctions these days you can see sales as a regular event where properties sold for way higher price then their assessed value or very close to it. And they are properties that still need significant amount of repairs and have no real economic sense to landlord. I am trying to find explanation to that kind of sales and only one that I have in mind is that those institutional buyers have no clue what they are doing and just spiraling up next economical disaster.
RichF,
Real Estate Agents want their phones to ring. If they advertise a house as a foreclosure, people might think they’re getting a really good deal, so they will call the agent.
It’s the same reason that agents don’t put prices in front of the houses. They want you to call them.
–Natalie
what natalie said. Additionally, some states require disclosure to buyers if the property is in foreclosure, this may be a way of complying with that disclosure requirement. If you want a more specific answer, call the agent that put the sign out there and ask them.
I thought RE agent bounded by fiduciary clause and it means if he/she advertises property as it is foreclosure, then it is property facing foreclosure with all the perks attached to it. Or REA will easily lose license.
Thank you for the answers. Natalie and Jack5 I didn’t think about the real estate agent listing it as a foreclosure to get the phones to ring. Thank you!!