The hottest commodities in the current investment market situation are undoubtedly foreclosure houses. Low-priced foreclosed homes are in such high demand that bidding wars have started between first-time investors and those who are already seasoned real estate investors. While there are many unsold newly built homes across the United States, buying a foreclosed home is a much more attractive proposition to the investor compared to ordinary homes offered on the open market.
The main reason is that banks and other financial institutions have control of the property and control the sale of foreclosed properties. In most cases, banks and other financial institutions have the right to sell foreclosed properties at a price significantly lower than the original purchase price to recover the outstanding debt and cover expenses.
It has now become very common to see dozens of bidders competing for a single foreclosed property on various auction sites. Although there are plenty of foreclosed homes available, well-priced properties are selling out fast. It is now common for first-time buyers to get outbid time and time again by some seasoned investors who show up with bags of cash to buy these lower-priced properties with a hammer blow on the county courthouse steps.
There are several such markets worth investigating, with a large and increasing number of homes in foreclosure. Some areas particularly plagued by unfilled vacant homes are South Florida and New York. In some areas like Manhattan, foreclosure listings have increased more than ever in history, just in the last year.
This oversupply of the market prices of these foreclosed homes is now setting the benchmark for the entire real estate market and thus further driving down the value of new homes. So how can a regular person trying to sell their house or a real estate developer trying to sell their new apartment compete with them?
When investing in foreclosed homes, it seems that the winners are those who have the stamina to wait for the right property to come down in price and on the market and are not lured by competing offers.