7 reasons Fresno real estate buyers should consider a distressed property
When the term “distressed property” gets thrown around these days, it can conjure up some largely negative thoughts, and rightfully so. This term can be deceptive and doesn’t always equal a piece of Fresno real estate that is in total disrepair.
When you think of a “distressed property,” sometimes it is better to think of a financially distressed property than it is to think of a physically distressed property.
I have represented the buyers of a distressed property quite a bit since this financial melt-down and in my experience, a distressed property can look as good as a brand new home. I frequently see financially distressed properties that are move-in ready with brand paint on all of the interior walls and brand new carpets on the floors, and sometimes brand new appliances. The exact opposite of physically distressed. So going forward, if you are thinking of buying Fresno real estate, consider a distressed property.
A study by the real estate website Trulia.com and data provider RealtyTrac says that more than 55% of home buyers say they are actively considering buying a foreclosure.
In some markets, foreclosures represent more than 80% of all sales.
7 REASON FRESNO REAL ESTATE BUYERS SHOULD CONSIDER A DISTRESSED PROPERTY
Fresno real estate buyers have a awesome opportunity before them to pick up great real estate if they were to consider the distressed property inventor. Here are some reason to consider:
1) GENERALLY LOW PRICES
All real estate pricing is market driven by supply and demand. But Short sale and bank-owned property prices do go below the rest of the current market. Sometimes 10% to 40% less than comparable traditional sale properties in the same neighborhood.
2) AFFORDABILITY
Affordability is related to falling prices. Declining Fresno real estate prices are making home ownership more affordable in comparison to Fresno incomes. There was a time, at the top of the Fresno real estate price boom, that only about 20% of residents could afford the average Fresno home. With falling Fresno real estate prices, that number is much higher and families that could not afford the “dream home” or first choice neighborhood can now reach that point.
3) MOTIVATED LENDERS
A lot of distressed properties on the market today are owned by financial institutions that have no interest in keeping the property on its books. Owning the property is not the bank’s first choice. Lenders no longer what the liability and the ongoing cost of owning the property. Most of the time, the lenders / owners are eager to sell the property to the general public quickly and even help with the financing.
4) LOW DOWN PAYMENT LEVERAGE
I have seen some lender programs that are offering as little as a 3% down payment for qualified buyers to get into a distressed property. This is allowing a buyer to move on a distressed property easier than a traditional sale property.
5) MOTIVATED LISTING AGENTS
The listing agent being asked to sell the distressed property doesn’t make the final decision about sale prices, however these listing agents are under a lot of pressure to get the properties priced right and sold. The listing agents only get paid when the property sells, so they are motivated financially to get the inventory moving.
6) MOTIVATED INDIVIDUAL SELLERS
Individuals that are underwater on their loan and are looking to get out from under a home they can no longer afford are highly motivated to sell as well. They are not enjoying their current financial situation and want to make things better for their families as soon as possible. The motivation to sell is definitely there, which will in turn improve their emotional situation as well.
7) MOTIVATED FIRST-TIME BUYERS
With interest rates on home loans as low as they are currently and Fresno real estate prices retreating as well, first-time home buyers are motivated to pick up Fresno real estate that has been in the past, out of their reach. It is reported that more than 50% of all buyers in the current market are first-time home buyers.
THE BOTTOM LINE
If you are a Fresno real estate buyer, you should consider adding distressed properties to the inventory that you view and consider for sale.
I know that buying a distressed short sale or bank owned property can be scary, and I will admit that these properties can be more complicated and stressful to get involved with. But, this means that choosing your real estate consultant becomes an even more important job. Choose a Realtor that has extensive experience in helping buyers to find, evaluate and acquire distressed properties.
Choosing a Realtor that has distressed property experience is the best thing you can do to help you navigate the current Fresno real estate markets.
I am happy to answer any questions you might have about the process.
Joseph Hollak
Realtor
(559) 399-0004
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3 Comments
5 keys to Fresno real estate buyers success with destressed properties | Joseph Hollak / 15 Sep 2010 / 9:30 AM
Brad Kelly / 06 Oct 2010 / 6:21 AM
Joseph Hollak / 08 Oct 2010 / 4:42 PM