There’s an excellent chance I’m too flawed to be a real estate agent in the Phoenix real estate market. We’re approaching April and I’ve yet to try and obtain a contract listing bank owned homes. And when I read things like the tail end of this article in the Arizona Republic, I cringe …
(Agent) said he works to find foreclosed homes for clients that can be fixed up in four weeks and then resold quickly before being undercut in price by new foreclosures.
“The last foreclosure home I worked with a client to buy and fix up was in north Phoenix,” he said. “It resold in a day for a $60,000 profit. The day we bought the foreclosure house, we had contractors ready and started marketing it for resale.”
First, these opportunities are few and far between and usually only can be realized if a property is absolutely thrashed to start with. Which, despite what the article indicates, eliminated a decent portion of the foreclosure population.
Second, is there anyone else less than thrilled with the idea that the flippers – the very group that fueled much of the run-up in the Phoenix real estate market to begin with – are back again? Is 2005 really that long ago to forget?
Apparently, I’m not alone …
“It’s great that foreclosure homes are selling and investors are interested,” said Margie O’Campo de Castillo of Arizona Dream Realty. “But too many investors got us into the current mess.”
I disagree only in as much as the real investors, the buy and hold types, didn’t cause the bulk of the damage. It was the speculators, the weekend warriors, the flippers. The folks who watched shows on HGTV and decided this was an easy way to make a buck now that their JDS Uniphase stock was worthless.
(It was fascinating and/or amazing to discover how many of the real estate investors I worked with in 2005 had JDSU – one of the poster children of the NASDAQ bubble.)
Where the article was spot on was in discussing the pace of the bank owned market. There are several buyers a day on my website looking for homes priced below $35,000. What I am trying my best to explain, with some success, is there are two reasons for such a price:
- The home is trashed
- The home’s in decent condition and the lender’s trying to spark a bidding war.
There are few things more frightening than an already 30-plus year-old home that’s been damaged by the prior owners. So more often than not, my buyers have run away from these properties.
And on the latter … unfortunately, it’s taking a couple of rejected offers before buyers believe a full price offer isn’t sufficient for a $30,000 home in decent condition. Sometimes the only way to create a believer is for several opportunities to pass them by first.
After all, odds are if you spot a home as a deal, you’re not going to be alone.
[tags]Phoenix real estate[/tags]