David van den Berg - Jul. 12, 2008 08:00 AM
The Arizona Republic
As the number of foreclosed houses in the Southeast Valley grows, potential buyers need to remember a simple message.
When buying a foreclosed property, you're getting it as is.
And, the financial institutions who have taken over the property may not know the history of the house, including major repairs made, as sellers do with non-foreclosed property.
"You have to inspect the home and look at the defects," said Ed Cassady, an associate broker with ReMax Alliance Group in Gilbert, who arranges free monthly tours of foreclosed homes. The next is scheduled for July 26.
"We have some foreclosed homes that are in excellent condition and some that are challenged."
Earlier in June, Cassady offered a bus tour of 11 foreclosed houses in Gilbert. Of the houses on tour, three needed significant repairs. Two were in move-in, nearly mint condition.
"I thought a lot of what we were going to see would need major repairs," said Andrea Ricketts , who with her husband, daughter and parents joined the tour in search of a family investment.
"It really kind of changes the way you think of them," said Sandy Sanford, Ricketts' mother.
As of June 26, 25 percent of houses listed for sale in Gilbert are either foreclosed or properties requiring lender or corporate approval for sale, according to Arizona Regional Multiple Listing Service data Cassady provided.
That's more than any other Southeast Valley municipality.
Percentages in much of the Valley, including in Mesa and Chandler, are in the 20s.
The number of foreclosed houses has jumped in the Southeast Valley.
In May 2007 in Gilbert, at least 10 foreclosed single family houses were sold, according to Realty Studies at Arizona State University's Polytechnic Campus in Mesa. From May 1 to May 15, 2008, the figure jumped to 75.
.In Mesa, the figure jumped from at least 25 to 125.
"I can't remember the last time I put a contract in on a regular, non bank-owned property," said Jason Williams, partner in The Solid Group, a firm that recently moved its offices to Rome Towers in Gilbert. The firm does most of its work in real estate, and works to help buyers find foreclosed houses.
Significantly reducing the Valley's inventory of foreclosed homes could take three years, Williams said Jason Williams, president of The Solid Group, a Gilbert firm that does most of its work in real estate, and works to help buyers find foreclosed
Buying foreclosed houses works best for investors, people who want to put work into their homes and adventurous first-time buyers, Cassady said.
Buyers of any background who purchase a foreclosed home should pay close attention to the neighborhood it's in, said Jay Butler, director of ASU's Realty Studies. Conditions that impact one household impact others in the area, he said, and income levels tend to cluster together.
"Homes in more traditional neighborhoods are likely to recover faster," he said. "You really don't want to buy into a hornet's nest problem."
Paying attention to the condition of the house, the neighborhood it's in and whether its priced right are tips buyers of non-foreclosed homes should follow anyway, said R.L. Brown, publisher of the Phoenix Housing Market Letter.
"It's just a different seller," he said. "There's a common misconception that there's some special status of a foreclosed house."
Prices of foreclosed homes can be cheaper, and financing can be favorable, Brown said.
"The terms might be more competitive," he said.
The number of businesses working to help home buyers find those terms is growing. Cassady's office has a group of agents who specialize in foreclosed homes, and he's one of the agents. Real estate is no different than any other sales business, in its need to respond to economic conditions.
"I came from a background that if something major is happening, you need to get into it," he said. "To increase my business, it's just a natural progression. It would be hard for me to believe that there are Realtors out there ignoring the foreclosures."
Michael Taylor, a Realtor with MoveTime Realty in Scottsdale, certainly isn't. .
His company provides personalized tours instead of the larger group bus tours. The firm is less than a year old and plans to specialize in working with buyers and banks on foreclosed house transactions. The company is finding a lot of work, especially in the part of the market under $250,000, thanks in part to increased usage of FHA loans. The loans are helping buyers get into houses with less or no money down, Taylor said.
"Real estate's on sale," he said.
Daxa and Naren Desai, who recently moved from Pennsylvania and are renting in Chandler, are confident in the local housing market and are looking for a house to buy.
They toured foreclosed or corporately owned houses in Chandler last month. In one, mail had piled up by the front door.
Daxa said she gave some thought to the stories of the people who had trashed foreclosed homes.
No comments:
Post a Comment