7.5 million U.S. Households In Foreclosure or Behind on Mortgage Payments
As lenders become overwhelmed by the 7.5 million American homes in foreclosure or borrowers defaulting on their mortgages, it becomes increasingly difficult for these banks to fully comprehend the value of properties they are foreclosing on. They often turn to local realtors and other brokers of the industry to help them determine a minimum dollar figure. But even with this aid, and due to the fact that banks would hardly draw any interest from investors or occupancy home buyers by setting opening bids at a property’s current loan balance, properties often wind up being auctioned off at Maricopa County (Phoenix, Scottsdale, Tempe, Mesa, Gilbert, Chandler, Peoria, Cave Creek, Paradise Valley, Fountain Hills, Glendale, Goodyear, El Mirage, Surprise, Litchfield Park, Tolleson, Sun City, Buckeye, Tonopah, Carefree, Gila Bend, Avondale, Wickenburg, Youngtown) trustee sales for prices below estimated market value.
With an estimated 639,000 bank owned and mortgage investor properties for sale across the U.S., not including the thousands more that go to sheriff or trustee sales every day, house flipping is making a comeback, especially across Arizona, California, Nevada and Florida, the areas that have been hit hardest by collapse of the housing market.
The flips these days involve a lot of fixes and are not like a few years ago where many investors were buying up new build single family residences and condos with the intention of quickly reselling them; today it’s all about attending the foreclosure auctions, grit biting lips w/ steady nerves and cold cash.
James Hagerty of the Wall St. Journal writes,
Buying at these auctions is perilous. There are no public viewings, so bidders often can’t know how much damage may have been done inside a house by occupants facing foreclosure… Unless they’ve done their homework, bidders also don’t always know whether they’re buying a home subject to a lien from another lender, which can happen in cases where the borrower took out more than one home loan. Because of such complexities, many of the bidders are people with experience in the property business.
The importance of having intimate knowledge of neighborhoods, real property values and the ability to physically evaluate homes and buildings headed to the auction block cannot be understated. Having experience in the bid process with the ability to display moxy and confidence is a necessity at Phoenix area trustee sale auctions. Sometimes an opportunity crosses an investor that requires a several hundred thousand dollar decision to be made in half an hour.
To read James Hagerty’s article from December 9th in the Wall Street Journal titled ‘House Flipping Makes a Comeback’ follow the link below.
Flipping Homes is Back in Fashion
For more information on the Phoenix Valley trustee sale process and to find out about our foreclosure auction bid representation service please contact Don W. Juvan at (480) 444-6110, or email him at dwjuvan@gmail.com.