Foreclosure Properties

Purchasing Foreclosure Properties  - Over the past year, nearly 50% of the recorded real sales have been attributed to distressed property sales.  Albeit the premise of purchasing a distressed property at a fraction of the value would be attractive to any buyer, purchasing properties outside of ‘normal-course’ can has other associated risk.  An educated buyer should weigh out the advantages and disadvantages and to determine if the overall benefits outweigh potential pitfalls. 

Some risks may include:

1. Limited disclosure  or prior information and history of the property that would generally be available in course of a traditional sale
2. Limited access or inspection period prior to final purchase
3. Potential liability or exposure to encumbrances or liens on the property
4. Limited buyer recourse for any problems with the property
5. Hostility in connection with a disgruntled prior owner
6. Necessary repairs both physically evident, and those discovered later
7. Improper, unsafe or out of compliance repairs, hidden fixes or poor upgrades

There are four general categories of distressed properties:

Short Sale – Property is still owned by the home owner, and is actively for sale “short” of the outstanding loans or mortgages. Many times these properties are listed for far less than what the bank or lien holder will accept to sell the property. Many short sales revert back to the bank for bank owned sale or bank auction.

Foreclosure – The legal proceedings where the lien holder(s)/ mortgagee (usually a bank) orders a termination of the lien holders right of redemption, and rights of use and occupancy of the property. This can be a timely process as it involved the courts.

Bank Auction – Proceedings where the lien holder markets a reclaimed property for open bidding to the highest bidder.  Often times the lien holder set a reserve which the property will not be sold below that amount. Properties that do not change hands under these proceedings revert back to the lien holders.

Bank Owned (REO) – Property that is in the ownership possession of the lien holder. Generally these properties are vacant and the banks are now more motivated to sell the properties to get them off of their books.

1. Are selling lists, subscriptions or information where you have to pay for information such as monthly subscription, or some type of profit splitting on properties that you will buy.
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3. Are only interested in selling you properties they own or their distressed property listings
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5. That are not local to our market and might not be subject to our laws
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7. Are not established full service real estate agencies and not associated with local RE boards
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9. That are seeking profits on proceeds of the distress properties that they identify for you.
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11. If the temptation is still too great, and you must purchase a property from one of these firms, make certain to employ your own independent Buyer's Agent to represent your best interests.

Why utilize Sotheby's Luxury & Coastal Group Agent's for distressed property purchases?

1. We grant you FREE access to our Foreclosure portal as a courtesy to expose you to short sale opportunities.
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3. We will expose you to all suitable distressed and non-distressed properties without any bias.
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5. We provide you professional guidance that will help you make a well educated decision.
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7. We are local and understand the local markets we serve.
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9. We offer full service from property search to closing by seasoned professional. 

Lucrative opportunities present themselves, and it is our strong recommendation that you seek our expertise before you attempting to purchase a distressed property.  On most short sale purchase opportunities all or most of the buyer’s agent sales commissions are generally covered by the seller or the bank.