Investment Opportunities in the Seattle Bank Foreclosures Market
By Kevin Simpson
Until this year, the city of Seattle did well to side-step the sub-prime meltdown that has been wreaking havoc across the country. But the city has not been so fortunate this year, The rate of foreclosures has been steadily increasing, although it is still not as high as in some other cities such as Los Angeles or Las Vegas.
Compared to other regions of the country, median home prices in Seattle have remained reasonably stable. Experts expect foreclosure activity in the Seattle area to increase marginally in 2009, but to remain under control in relation to other major cities. Furthermore, the recent rate cuts and the overall easy money policy of the fed is expected to reduce foreclosure numbers significantly.
All indications are, that the current wave of foreclosures and the housing crisis in general might not be around for too long. Prospective buyers with cash on their hands are rushing to take advantage of the situation.
Seattle bank foreclosures in particular, are finding favor amount first time home buyers and real estate investors. This is primarily due to the fact that a predominant number of Seattle bank foreclosures trade significantly below their market values. In many cases, it is not uncommon for foreclosed property to trade at discounts of up to 20%-30% to market value.
Although purchasing a foreclosed home sounds attractive, it must be emphasized that a certain amount of caution needs to be exercised while selecting the property to buy. Whether you are looking to occupy the property yourself, or looking to resell for a profit, there could be a significant cost involved in repairing the house and bringing it up to the inspection standards of the city.
The condition of the foreclosed house should play an important role in your decision, as well as in the price of the property.
Another consideration while purchasing foreclosed property is the timing of the purchased. Most foreclosed houses are entered into the market via a public auction and purchasing the house during the auction is the most popular way of acquiring foreclosed property. However, it is not commonly known that almost half of the homes that come up for auction fail to find a buyer. Theses houses will be reclaimed by the lender, who will then try to offload it using conventional methods.
The post auction period might actually be a better time to acquire the property, as the banks are likely to be particularly aggressive in selling property that has been on the market for a while.
Finally, with the steep rise in the number of foreclosures by banks recently, it is possible that many of the homes might have belonged to homeowners with little or no equity prior to the foreclosure. In such cases, the price of the home may get very close to what the banks or mortgage lender is trying to recoup and such property might not trade for as steep a discount as other properties.
In matters like there, your real estate agent should be able to give you an idea about the bank’’s guidelines and policies. To summarize, although foreclosed houses are a great deal, it is still important to crunch the numbers, ask questions, research and do everything else you can to ensure that you are getting the nest bargain that you can.
About The Author
Kevin Simpson, has been working on BankRepoHomes.org studying the foreclosures market, helping buyers on the finer points of Bank Foreclosures. Try to visit BankRepoHomes.org and find all related information about Bank Repo Homes.
