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With over 25,000 homes on the market in the Denver-Metro area, it should be easy to find a home at a huge discount, right? The media has bombarded us with news of massive foreclosures and a downward-spiraling real estate market. Surely, this must be the ticket to finding a great home for little money. To truly understand today’s housing market and how it may or may not impact buyers and investors, it is important to understand all the facts.
Pre-Foreclosure is now termed “short sale” in the real estate industry. A short sale is a bankruptcy or foreclosure alternative for a homeowner who is no longer able to keep their mortgage payments current. Typically, a short sale is necessary when the obligation on the property is greater than the market value of the home. A lender agreeing to a short sale proceeding is agreeing to accept less than the total amount due by the homeowner. Not all lenders are willing to accept a short sale. On occasion, it will make better financial sense for a lender to foreclose on a property.
From the point a homeowner goes into default until it reaches the public trustee for sale at auction, the home is in the Foreclosure process. When a home is scheduled for auction, a minimum bid is set, which covers the following: loan balance, accrued interest, attorney’s fees, and costs associated with the foreclosure. If bidding, a potential buyer must have a cashier’s check at the auction in the amount of the bid and be willing to purchase the home “as-is”.
Typically, the minimum bid price is set at a value greater than the value of the home. If no one purchases the home at auction, then the property reverts back to the lender. Lenders call these homes REO (real estate owned) properties. Once the lender owns the property, they may make minimal repairs to ensure the home’s sale. These homes are listed in the local MLS and marketed by a Realtor©. Getting a “deal” in the real estate market is possible, but for the most part those days are gone. It is more important now than ever to speak with a real estate professional when buying or selling a home. It is vitally important to know if a property is priced properly. Competition is fierce and homes that have been staged and priced well will sell quickly. There may be over 25,000 homes on the market in the Denver-Metro area, but quality homes are still bought and sold in a short period of time. If selling a home, get advice from a Realtor© and price it well – it will sell. If buying a home, get advice from a Realtor© and when you see a home you want to call your own – don’t delay or it will be someone else’s home, not yours!
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