I want to buy a Short Sale (or Foreclosure)!!!!

Not exactly what i wanted to kick off 2012 with, in terms of a "Hey, things really ARE looking up for 2012" post, but I did meet with a new potential client last week.  he had called about a really "cute" listing I have in South Raleigh - which I'll share in my next post.

But upon hearing of this home, he wanted to offer 20% less than the asking price.  Pretty soon, our conversation turned to short sales and foreclosures.  And he specifically wanted to concentrate on investment properties as well.

Well, we scheduled a quick meeting last Friday morning, and I got to doing some research.  Here's what I found:

In the US -  1 in 20 short sales actually work before foreclosure.

This means you might put in offers on up to 20 homes before ANY of them, months later, work out. 

In the Triangle – there were only 101 successful short sales below $150,000 in all of 2011. 

Today, there are 130 short sales available – meaning you might expect it to take ONE YEAR to complete the purchase. 

The short sales went for 96% of asking price, and an average of $108,000.

However, there were 1,462 “regular” homes in that price range sold last year.  They sold for an average of $112,000 and 95% of asking price.

There were 445 foreclosures (REO or HUD) sold last year. 

The foreclosures sold for an average of $99,000, which was 95% of asking price.

So, you can buy a habitable home, pre-inspect it, easily get a loan, and pay $112,000 for it. 

Or, you can wait for months, and if you're successful, save $4,000 on a short sale - well, let's think of it as $19 a month. 

Or, you can roll the dice that a foreclosure doesn't have big issues - unforseen issues - and get it for $99,000 and spend the $13K fixing it up.  Of course, in order for this to work, you've got to actually HAVE that $13,000 to make repairs.