Why Foreclosures And Short Sales Are NOT A Good Deal Right Now

Why Foreclosures And Short Sales Are NOT A Good Deal Right Now

Everyone wants to get a good deal...right?  It seems like when most people think "good deal" they think short sale or foreclosure.  However, that is no longer the case.  Short sales and foreclosures have really dried up since 2009.  See chart for the number of foreclosure and short sale closings for Larimer and Weld county from 2009 through 2014 (2014 closings are extrapolated from September 30th through the end of the year if the current number of closings hold).

In terms of what's currently available:

Larimer County Active Foreclosures: 16
Larimer County Active Short Sales: 5

Weld County Active Foreclosures: 24
Weld County Active Short Sales: 5

So why would the decline mean that they are not a good deal?  Well in the first place you have more competition because everyone else still thinks they're the way to go and so often they will get bid up beyond what would be a good deal.  Secondarily, property condition is always a concern with distressed properties that sit vacant for long periods of time.  The market has recovered which is why short sales have been virtually non-existent.  

So where are the good deals?  Estate, equity and relocation sales.  An estate sale happens when someone passes away and the property is sold by the beneficiaries of the will.  Often times they want to get it off their plate and will sell it for under market value to get it sold quickly.  Equity sales are when people have a good chunk of equity in their home and therefore are more negotiable.  Relocation sales are often because of a job change and they are on a time constraint, which makes them more negotiable.  

The market cycles and foreclosures and short sales may come around but as of right now, they are not the best deals out there.

****Data for chart taken from IRES 

Sarah Rowan Headshot
Phone: 970-397-5774
Dated: September 30th 2014
Views: 414
About Sarah: Sarah was a licensed real estate agent for 10 years before transitioning into the mortgage industry ...

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