As the housing market continues to struggle and employment rates fall, more and more banks are foreclosing on their loans and acquiring many different properties. As the number of foreclosed homes increases, it creates an opportunity for people to buy a home at a significantly lower price than they could have just a couple years ago.
Utah in particular has a large number of foreclosed homes that the banks need to sell as soon as possible to recoup their costs.Andrew JohnsonWhen considering the purchase of a foreclosed home, be sure to do adequate homework beforehand.From the archive
- Discount for foreclosed homes widened in 2010 – Feb. 23, 2011
- Banks repossess 1 million homes in 2010 – Jan. 13, 2011
- Sales of foreclosed homes dropped in third quarter – Dec. 8, 2010
- Foreclosures made up 25% of U.S. home sales in third quarter – Dec. 2, 2010
- Many businesses benefit from a robust foreclosure process – Nov. 22, 2010
According to RealtyTrac, a company that collects data on auction and bank-owned listings all over the country, there were 19,453 foreclosure homes in Utah in July 2011. That works out to nearly 1 in every 373 homes.
Salt Lake County has a lot of possibilities for potential home buyers who are looking for a great deal (whether they intend to flip the house or make it their primary residence). RealtyTrac reported 7,527 foreclosures in the county — 4,139 of which are within Salt Lake City limits. Utah County has 3,484 (454 in Provo), and Washington County weighed in at 2,111 (nearly half of them in Saint George).
Purchasing foreclosed properties has the potential to create good investment returns, as well as improving the possibility of buying a home that would normally be outside of a buyer's budget. However, buyers still need to be extremely careful about their purchases, and the price alone should not be the deciding factor. There are still many things to consider.
When investing in a foreclosure, there are important things that must be examined closely. Purchasing property sight unseen is something that only those with sizable amounts of disposable income should consider. Take your time and look closely at some of these things and make sure that any repairs or other maintenance issues won’t end up draining all the potential profits.
Look at the neighborhood. If there are a lot of foreclosures in the area, or the neighborhood has a high crime rate, it will very difficult to turn around and sell the house again. Even the condition of the neighbors’ yards can impact the perceived value of the house.
Look at the landscape. If the property has been on the market for any length of time without proper maintenance, uncontrolled trees or bushes could contribute to the deterioration of the home. Vines may creep over the house and roots may crawl down toward the foundation. Make sure that someone has been watching the property between owners.
Look at the underlying structure. Don’t turn on the utilities until an inspection has been performed on the structural components of the house. Check for cracks in the plumbing, any signs of growing mold and even questionable wiring.
Purchasing foreclosed properties has the potential to create good investment returns, Just be very careful and make sure to check with a professional that is what we are here for.