Who wants to be kicking themselves later for missing the chance to buy discounted Colorado real estate right now?
January 26, 2011
Search a huge variety Colorado short sales, foreclosures and bank owned real estate here. But please read this article first. Despite the current pessimism, the Colorado real estate market will stabilize at some point. It’s inevitable. When? Who knows, but what is for sure is that nobody wants to miss out on a sweet deal. We have all heard how much a person can save by buying a foreclosure. What is a short sale anyhow? My cousin “stole” that house, how do I do the same? We’ve all heard chatter and read questionable blogs – mostly speculation – sincere but unreliable info. How do you know what to do? Sure, you’re interested. But you don’t want to pay too much or get trapped in a money pit. What are the facts on short sales, foreclosures and distressed Metro Denver homes? Can I buy one by myself? What good is a Realtor in this situation; can they even find a short sale or foreclosure in Castle Rock, Parker or wherever? Is Colorado Springs a better place to look?
How to buy short sales, foreclosures and distressed Colorado houses and make out like a bandit. We can tell you without pause that buying short sales, foreclosures and distressed homes can be a challenge to say the least. That said: buying one of these homes can be well worth the effort. That is the case whether in Metro Denver, Parker, Castle Rock or Colorado Springs or virtually anywhere in the state. First, the terms:
Short sale: The house or land remains the property of the private owner. The lender is being asked to accept less money than the outstanding mortgage balance on a home, piece of land or real property. Short sales can be long and drawn out, because the lender does not have to accept the “offer” that is on the table. Not all lenders even accept short sales. Sometimes it may make more financial sense for the lender to foreclose. There might be multiple offers under consideration at the same time. This process is not for the faint-of-heart.
Foreclosure: the house or land has become the property of the lender after a long process called foreclosure. However, just because the lender has taken ownership of the house, it may not yet be listed for sale. The foreclosed property can sit in limbo for many months. Sometimes the lender will offer the property via an alternative channel instead of a listing. This is referred to as an REO sale. However, these days, when a lender is ready to dispose of a foreclosed Colorado home, it is mainly offered through a Realtor and listing service. Why? Because listing a home this way gives the lender the best chance of selling the foreclosed house. The home is usually offered “as is” and below market value to make its sale a certainty.
Distressed Property: both short sales and foreclosures are “distressed.” Other situations might include pre-foreclosure or a scenario where the payments are up to date on the home, but the owner is in a state of financial duress. They will ultimately lose the home to foreclosure.
How are Realtors involved? Because short sales, foreclosures and distressed homes are listed through services, these listing services have added search tools enabling agents to easily locate a large variety of distressed homes for their clients.
What kind of shape are the homes in? Conditions of these Colorado properties run the gambit. Just because a home is being offered as a short sale does not mean it is in bad condition. A short-sale home might be virtually new and in near-perfect shape, but this is the exception. Many short sales can be rated as good to fair. A home in foreclosure is another case entirely. Generally, there has been light or (more often) moderate abuse of the property. Severe abuse of the home by the previous residents is common.
If you are considering buying a short sale or foreclosure, we encourage you to start by obtaining legal advice from a competent real estate lawyer. Shorts and foreclosures can also present some interesting tax situations. Therefore, we highly recommend that you give your accountant a call to discuss any short sale or foreclosure tax consequences.
Challenges:
- You can spend lots of time trying to find a distressed Colorado home that is actually worth making an offer on.
- Understanding how to negotiate with a bank or lender. Many serious buyers have lost the negotiation battle on a house they really wanted by failing to understand the nuances of a foreclosure transaction.
- These are often stressful processes involving long response times from lenders on short sales and foreclosures.
- What do you do while you are waiting for a response? Look at more houses or live in limbo? This is a very common dilemma.
- Obtaining a loan on a home in poor condition is difficult.
- Can you alone determine whether the price of the house plus repairs makes financial sense?
- Distressed properties are offered “as is” and typically have no warranty.
- Obtaining financing for repairs can be nearly impossible.
Opportunities:
- Getting a great deal on a home
- Recent changes in Colorado real estate contracts offer greater protection to you as the buyer. We would advise that you not even consider making an offer without the new Colorado contract!
- Potential for instant equity even in the present market
- Buying a home for less than market value insulates you, to a degree, from further declines in the market.
- Don’t guess! Our job is to help you to determine whether the price of the house plus repairs makes financial sense.
- We can make you aware of loan programs available in some instances for both buying and rehabbing some types of foreclosures.
- Have the expert services of a local Colorado Realtor in a challenging transaction, get a killer deal, and sleep like a baby during the whole ugly process.
Everyone wants to save money and not pass on an opportunity. Short sales, foreclosures and distressed homes certainly offer the chance of getting a great deal on a Colorado home. If you would like to discuss this topic in more detail, why not give us a call? We are truly “no pressure.” However, we can take a lot of pressure off of your back if you are considering a Colorado short sale, foreclosure or distressed home. We want to help because we know that happy customers will refer us to friends and family.
Colorado New Home Specialists
