By John Bradley
Buying a home from the foreclosure properties is a profitable proposition – no question. But unless you know how, the risks are more – especially if you want it to go alone by yourself in a foreclosure sale public auction. Media carries reports in abundance about how professional investors are thriving from squaring off properties – not specifically Sacramento properties but all over California – for their business of flipping distressed sale homes.
There is a separate segment called professional investors – mostly groups of wealthy individuals and private equity funds run for a profit motive – targeting the distressed properties, which are scheduled for public foreclosure sale auction held at the County Court premises every month. In the present economic scenario, investment opportunities have shrunk to make quick bucks, as in the past, and so these foreclosed properties are being selected for investment by this group of people.
So they buy anything coming their way, irrespective of the defects, damages and repairs, spend more money to give a facelift and flip it in the market. They are ready for a gamble, when you as a genuine buyer cannot.
Talking of risks involved in a foreclosure auction property, you do not get a chance to inspect the home thoroughly, as in the case of a traditional sale or a bank-owned property building, which is kept in a vacant and ready-to-occupy condition. In a foreclosure property, until the auction is over and the title handed over to the highest bidder, chances are existing owners live in that premises.
Even in the case of a vacant property, deserted by the frustrated home owner, there are innumerable instances coming to light of homes with smashed walls; knocked out water heaters and similar appliances and ripped out toilets.
Typically in a Court House, the properties taken for auction that day will be announced only then with full addresses, and there is no chance of seeing the inside of the property, even if you rush to that locality and personally assess the condition of it. But professional buyers and wealthy absentee buyers, through their representatives present at the auction venue, with stuffed bankers’ checks to tout at the close of the auction will be your competitors.
See the statistics – in California the number of foreclosure properties – inclusive of Sacramento properties – sold in January 2009 were a mere 884, whereas the number went up to 4,336 in April. Since lending banks offered fewer numbers of properties for auction, after a mellowed stand to give more options to delinquent borrowers like Short Sale, there were only 3,483 in July.
So what is the best option? Selecting a Sacramento Realtor; leave the risk of buying a good, formidable and lucrative Sacramento property from Sacramento listings, which also contains foreclosure properties and be relaxed to acquire the most suitable one for you at an affordable budget.