The recent housing market decline has provided an unprecedented opportunity for buyers looking to purchase a condo to be their primary residence, second home, or investment property. The State of Florida was hit hard by the foreclosure crisis, and many condos can be acquired at rock bottom prices, if you know where to look. As a Miami condo Realtor, I work with many clients who are interested in these foreclosure deals.
A Realtor Can Help
For most people, the best option is to work with a Realtor who is knowledgeable about the local market, who is responsive, and has time available to preview these foreclosure properties for you. Banks are currently holding foreclosure inventory which they list for sale using local Realtors. Once the inventory hits the market, it doesn’t last long — most properties are sold within 30 days to all cash buyers. In Miami, it is not uncommon for the best bank owned condos to receive 20 to 30 offers. If you want to obtain one of these properties, it is important that you submit an aggressive all-cash offer. Most of these properties end up selling above the list price. As a Realtor, I receive notifications when these properties are listed for sale, and am out daily previewing these properties on behalf of my clients. I suggest you find a Realtor to do the same for you. Your Realtor will also be able to give you advice on what price to pay for the property. On my blog you can read more about buying a Miami foreclosure condo.
Foreclosure Auctions
Another option for savvy buyers or investors is to purchase a condo at a foreclosure auction. The foreclosure auctions are run by the county court, and to purchase a property you need to wire the funds to the court within 24 hours. As a result, these are all cash transactions. Many counties are moving their foreclosure auctions online. Miami-Dade County and Broward County have been conducting successful online auctions for over 6 months now.
There are no restrictions on who can purchase property at the county foreclosure auction as long as the individual has the cash available for payment. However, the foreclosure auctions are usually attended by knowledgeable individuals that are able to navigate through the potential pitfalls of purchasing a property at auction. At auction, the properties are sold “as-is”. This means in most cases, you won’t know the condition of the property interior in advance, which could be damaged.
Furthermore, there could be a tenant living in the property that you might have to evict. Also, the property may be subject to additional liens that you will be responsible for as the new owner. For example, you could purchase a property at auction where the second mortgage holder is foreclosing, leaving you responsible for satisfying the terms on the first mortgage. If the property is a condo, you might be responsible for paying off the balance of the monthly assessments that are owed to the association.
This option isn’t for everyone, as I’ve received several calls from individuals who thought they were paying $15,000 for a condo worth $150,000. What they failed to realize is that the condo association was foreclosing on the unit, not the first mortgage holder. Now these owners are stuck having to satisfy a $300,000 mortgage which is still in first position. Buyer beware.
About Guest Author: Marc Knight is a Realtor specializing in Miami & Miami Beach condo sales. He operates a website and blog called Miami Condo Shop