In February of 2008, foreclosures in the metro Phoenix area hit 2,500, which is a record monthly tally since 1990. This trend continues now into 2009 and is expected to continue for the foreseeable future.  Historically, foreclosures were dominantly found in the lower price ranges and often in less desirable areas. However, in the current Phoenix real estate market, while there are good value homes in lower prices, there are also foreclosures in higher price points and in all communities.

"Foreclosure Investing" is the new buzzword amongst real estate investors. With visions of profits, many investors are flocking to Phoenix in search of deals on high-end homes in desirable neighborhoods.

While there are great values in many of the communities, investors need to understand that the banks are not going to accept "fire-sale" price offers. There might be some negotiating room in some properties, but nothing that is dramatically different than the listed price. (For example- let's say a home is listed as a foreclosure for $250k. Making an offer for $90k will be a waste of everyone's time. Banks to date are willing to sit and wait for an offer that is close to, at or above list price. Many of the very well maintained foreclosures that need little done to them are seeing a bidding war for them with the offers coming in well above the listed price. Often times a buyer will find themselves bidding for a property with many other offers being looked at all at the same time.)

Is Foreclosure Investing Right For You?

The profits from investing in foreclosed properties can be enormous, but so are the pitfalls. Purchasing foreclosures can be a complex process and intimidating for beginners who don't have at least a few years' experience with traditional real estate investment. If you are a buyer, don't try to buy foreclosures without an experienced agent who understands how the foreclosure sales are working. The Benjamin Team is experienced, trained and well versed in all aspects of foreclosure sales.

A foreclosure buyer can do inspections and if there are structural issues that are not to the liking of the would-be buyer, the buyer can cancel the contract agreement and not close on the home. But foreclosed homes are all sold "as-is", and nothing will be fixed by the banks who now hold the property.  ("Short - sales" are also always sold "as-is" also.)

If you are fortunate enough to get an offer accepted by the bank holding the title to a foreclosed property, all banks will then issue a separate addendum which the would-be buyer must sign and agree to in order for the sale to move forward. These addendums are wordy, many pages in length, and without exception take away many of the traditional buyer's rights that are afforded by the traditional Arizona purchase contracts. Agreeing to the banks terms is the only way to buy the foreclosed property.

If you are a buyer or an investor and are interested in finding short sale or foreclosed homes in the Phoenix, Arizona area, contact us for a list of available foreclosure properties for sale.

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