Why Fool Around With Foreclosures?
Recently I was invited to lunch with a group of real estate agents in St. Petersburg, Florida. I'm not going to name names, but there were some pretty smart cookies sitting around that table.
One of them was an up-and-coming young man with Tourtelot Brothers named Jeff Joyner. His family goes back many years in the Tampa Bay area and they did some very successful residential developing in decades past. Jeff seems to have been passed the family's real estate genes and he is one of the smartest young real estate agents you are likely to meet.
We were all talking about the real estate correction that is going when somebody mentioned foreclusures. Seems like whenever things get bad in real estate, foreclosures are a subject of discussion because so many buyers and investors think it's the road to a bargain.
Jeff Joyner sat quietly listening to this discussion, not saying a word. Finally he managed a wry smile and then volunteered that he didn't think much of chasing foreclosures and often advises his clients not to spend much time doing it.
The reason?
Jeff Joyner feels there are much better deals in the regular real estate market from among sellers who have owned their property for long periods of time.
Jeff explained to all of us that long-term owners have had time to benefit from years of property appreciation. As a consequence, they are in a good position to accept something of a bargain price and still make a handsome return. The person facing foreclosure must get a higher price in order to pay off his outstanding mortgage no matter how desparate the situation. If the property being foreclosed upon was purchased within the past two or three years, the seller most likely will need to get a price near the current market value -- and that's not really much of a bargain given prices from two or three years ago.
Jeff pointed out that the person who has owned a property for 10, 15, 20-years or more has loads of built up equity and may be more agreeable to negotiating a somewhat more affordable price. It all depends on the long-term seller's motivation -- which can be just as desparate as the person facing foreclosure. If the seller is mortgage-free, they may be even more likely to negotiate a good deal with the buyer.
The more I thought about this approach, the better I liked it. Essentially, instead of looking for foreclosures, look for sellers with long-term ownership and lots of equity. If possible, find sellers who have already paid-off their mortgage. Depending on the seller's motivation, you may end up negotiating a better deal and have much fewer headaches trying to close.
Good thinking, Jeff!
For more information about real estate in the Tampa Bay area, visit my website at http://www.thestpeterealestatesite.com/.
One of them was an up-and-coming young man with Tourtelot Brothers named Jeff Joyner. His family goes back many years in the Tampa Bay area and they did some very successful residential developing in decades past. Jeff seems to have been passed the family's real estate genes and he is one of the smartest young real estate agents you are likely to meet.
We were all talking about the real estate correction that is going when somebody mentioned foreclusures. Seems like whenever things get bad in real estate, foreclosures are a subject of discussion because so many buyers and investors think it's the road to a bargain.
Jeff Joyner sat quietly listening to this discussion, not saying a word. Finally he managed a wry smile and then volunteered that he didn't think much of chasing foreclosures and often advises his clients not to spend much time doing it.
The reason?
Jeff Joyner feels there are much better deals in the regular real estate market from among sellers who have owned their property for long periods of time.
Jeff explained to all of us that long-term owners have had time to benefit from years of property appreciation. As a consequence, they are in a good position to accept something of a bargain price and still make a handsome return. The person facing foreclosure must get a higher price in order to pay off his outstanding mortgage no matter how desparate the situation. If the property being foreclosed upon was purchased within the past two or three years, the seller most likely will need to get a price near the current market value -- and that's not really much of a bargain given prices from two or three years ago.
Jeff pointed out that the person who has owned a property for 10, 15, 20-years or more has loads of built up equity and may be more agreeable to negotiating a somewhat more affordable price. It all depends on the long-term seller's motivation -- which can be just as desparate as the person facing foreclosure. If the seller is mortgage-free, they may be even more likely to negotiate a good deal with the buyer.
The more I thought about this approach, the better I liked it. Essentially, instead of looking for foreclosures, look for sellers with long-term ownership and lots of equity. If possible, find sellers who have already paid-off their mortgage. Depending on the seller's motivation, you may end up negotiating a better deal and have much fewer headaches trying to close.
Good thinking, Jeff!
For more information about real estate in the Tampa Bay area, visit my website at http://www.thestpeterealestatesite.com/.
-30-
posted by Terry Ward at 6:34 AM
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