Real Estate Naples Foreclosures
The Real Estate Naples Foreclosure market has turned around in the past 18 months. There are still many distressed properties in the area but filings (new foreclosures)in both Collier and Lee Counties are well down from the peak.
From over 4400 closed sales in the Naples area in the past 6-month, 558 of them were foreclosed properties, this is more than 25% below the amount of foreclosure closed sales in the same period of time a year ago.
Out of the 558 foreclosure closed sales, 328 were single family homes, 110 of them in Golden Gate Estates, the hardest hit area in Naples.
Foreclosure homes in Naples have sold in the past 6 month at an average price per square foot of $117.20 and the average Sale Price to List Price was 100.63%.
Our Brokerage has handled many distressed properties. The question everyone wants answered is …are there still “deals” out there in the foreclosure market. The answer is YES. That answer comes with a caveat. Even though there are still foreclosures out there, there are 3 major factors that have affected that niche .
- Banks know that the rebound in the market has happened are have adjusted their prices accordingly
- The number of buyers/investors has shot up meaning more buyers area competing for less properties. You have to “be ready” when you find the right property
- Many of the owners have opted for short sales as the procedures have been streamlined and standarized, so there are more short sales percentage-wise.
Deal or No Deal?
There are 9 very important factors to consider when buying a Naples Foreclosure Property
- One should always remember that the bank that owns the asset has already done their homework before they listed the property. In other words, they have already sent an agent to do a BPO (broker price opinion), to assess the value of the property before and after improvements. Should the bank consider the improvements necessary, in many cases they will contract painters, carpet layers, cleaning crews, and landscapers etc to improve the property before offering it on the open market. In most cases the list price is significantly below market value.
- A new foreclosure listing will always stir interest from a multitude of cash investors and even from the less savvy buyer who wished to get a “deal”. Therefore, you will always encounter multiple buyers competing for the same property having to get involved in a multiple offer situation, which may bring the price above the list price in many cases.
In fact, out of the 558 foreclosure properties sold in Naples in the past 6 month, 273 of them, over 50%, have closed at or above the listing price.
- In many cases the bank will accept an offer from a cash buyer even if the price is lower than another one from a buyer with a mortgage.
- Making an offer higher than the asking price will always improve your chances to acquire the property even if you formulate the offer with cash back at closing.
- The terms of the offer are very important. In other words, asking the bank to make repairs, offer contingent on the sale of your home, over days closing period will usually make the bank reject your offer.
- If you made an offer and the bank counter offered, this is your best chance to buy the property. Don’t blow it. If the bank does not counter, this means there are multiple offers and you will have to fight for the property and in many cases, over 50% of them, you will have to pay the full asking price or above the asking price.
- Be prepared to make significant repairs to a foreclosure home. You have the right to inspect and to back out of the contract if the results of the inspection are not satisfactory. Although banks are not out to collect your escrow deposit, it is always important to follow the time constraints of an As-Is contract which may be significantly different than a contract used in a traditional sale.
- The seller will always choose the attorney or title company doing the title closing. As a buyer, you have the right, at your expense, to retain the services of an attorney to review all the documents but remember, altering any of the bank contracts will likely be a deterrent to the completion of the transaction.
- Since Foreclosure properties always sell slightly below market value, keep in mind that you can make a higher offer and ask the bank to pay up to 6% of your closing costs which depending on your loan, can put cash back into your pocket. Consult your Real Estate Associate for this strategy.