REALizeUtah.com Real Estate

Is now a good time to buy a foreclosure?

This is a very common question from both real estate professionals and prospective buyers. Obviously, because local market conditions vary, the answer is different from market to market. But there are questions that buyers in any market should be asking before they make an offer on a property in foreclosure.

What’s the first step buyers need to take?

You need to be preapproved for a loan before shopping for a foreclosure. If you’re thinking of buying a foreclosure as an investment or second home, you need to understand that financing the home will be more difficult and more expensive than financing a primary residence. Lenders typically charge higher interest rates and require a larger down payment for investment or second homes.

How can you tell a bad foreclosure from a good one?

Certainly there are great deals in many markets for both investors and buyers looking for a primary residence. But making a sound deal can be tricky. Buyers need to be wary of unpaid liens, including mortgage debt, taxes, construction loans, home equity lines of credit, and possibly a second or third mortgage. Any or all of these financial obligations could become your responsibility when you purchase a property in foreclosure. Unless the property goes through a foreclosure auction and becomes a bank-owned REO, the outstanding foreclosure liens and fees could be simply transferred to the new owner-you.  Don’t fall into the same financial trap as the previous owner.

What are the costs of buying a foreclosure?

It takes money to make money. The best opportunities are for buyers with cash. If you are planning to rent out the property or even resell it for a quick profit, make sure you consider the carrying costs, including sales commissions, marketing costs, vacancies, taxes, insurance, and maintenance costs. Once you’ve calculated all the expenses, add on another 10 percent to 15 percent. If you don’t build in a “surprise fund,” you might be the next foreclosure statistic.

How does choice of neighborhood affect foreclosure investments?

If you’re looking for a good investment you should generally avoid neighborhoods overrun with foreclosures, particularly newer subdivisions in overbuilt exurban areas. Investors will be tempted to buy foreclosures in these areas because they offer the steepest discounts-but they also carry the most risk of further depreciation. Look in well established neighborhoods with good schools and transportation. If you’re in a market where prices are still falling, factor the falling prices into any offer you submit on a foreclosed property.

Source : NAR

Please feel free to call me if you have any questions.  If you’d like to see a list of foreclosed properties in your area, I have access to lists of foreclosed and short sale properties anywhere in the state of Utah.

The much anticipated, much needed grocery store in Midway, “The Store”, had it’s grand opening today, and the parking lot was full!  I decided to stop by to pick up something for dinner, and to just check it out.    When you first walk in, you see a lounge and fireplace.  There are many locally sourced products throughout the store, and the selection is much better than some grocery stores that are twice the size.  The store is complete, with a nice produce section, great deli, fresh salad bar, dairy section,  and good selection of dry goods.  It even has a pretty decent selection of beer!  While it doesn’t have as much of an emphasis on Organic and Natural goods as stores like Whole Foods, it has a much better selection than most other grocery stores.  Overall, it feels much ‘higher end’ than either of the grocery stores in Heber.

I know this store will be a great addition to Midway, especially for local residents like myself who live less than 5 minutes away.  It will also be convenient to winter tourists staying at Midway’s Zermatt and Homestead resorts. I’m very happy to have it here, and think most others in Midway will agree!