These days the Sarasota real estate market is definitely a buyer’s market. However, prospective home buyers still want to get the best deal they can and therefore often wonder how they can purchase a Sarasota real estate foreclosure.
When Sarasota homes are foreclosed on due to non-payment, the properties are put up on auction at a Sarasota real estate foreclosure sale. When there are no bidders the property is then placed into the lender’s inventory. This inventory is listed in the REO (Real Estate Owned) property market.
Truth be known, when purchasing a Sarasota real estate foreclosure, you will NOT generally end up with the best deal if it is from an REO listing. Obtaining an REO list is not difficult, and if properties are easy to find then you will certainly have a lot of competition…especially if there is an investor involved that specializes in Sarasota real estate foreclosures for a living.
The main problem is that homes that are on REO lists are well known for NOT having any available equity, due to this they are NOT generally sold below market value.
Once a home has been foreclosed on it will be auctioned off. The bidders in the auction will include investors, those looking to buy a home for themselves, and lenders (even the actual lender that held the note that was foreclosed on). In most cases, you will find that the lender that foreclosed will bid the amount that is due from the mortgage plus any interest, penalties, and fees that have accrued. Then, if there is any equity left in the home, the other bidders will bid until there is a winner. At this point there is either no equity left in the property or there were no other bids and then the lender keeps the property.
Don’t lose faith…
There have been times when a lender has placed an REO home onto the market without looking at it or doing anything to it. If the home has damage and it has not been properly repaired and put up for sale, you may find a deal. However, the general case is that most prospective buyers will NOT look at these homes because they fail to see the potential so they get left for the investors. Therefore, more lenders are now making repairs before putting the homes on the market because they have realized that they can get a higher price. Investors usually don’t want the repaired properties because there is no room for them to make a profit. This is good news for someone looking to buy a home because then you do not have to compete with an investor, you do not have to make repairs to the home, and you may be able to get a good deal on the home from the lender.