Parts of Florida have been hard hit over the last several years with many Foreclosures (Now Bank Owned) because of the drastic drop in values. Many leading economist have publically stated that Florida has experienced an over correction in pricing and as evidence these banks are currently selling many of their Real Estate Owned (REO) inventory at prices well below reproduction costs. At Courthouse Auctions and through select Realtors many of these REO’s are being sold at very low rates compared to the prices at which similar homes can be purchased in the current open market.
Some areas of Florida like the Southwest part of the state, (Ft. Myers, Cape Coral, Estero, Naples’s) prices have dipped so far below cost that currently many astute buyers have been purchasing these REO’s at 30-40% below reproduction cost and 10-15% below current market values. Bank Homes can be purchased in many ways and various conditions from those needing minor repairs to full renovations. Most purchase contracts for these on the market properties give 5 to 10 days to perform due diligence which allows the buyer proper time to determine the needs of the property. On the other hand, it is difficult to do a full-fledged inspection to determine the costs of repairs when buying directly from the Court House Steps. Most auctioned sales have to be purchased in as is conditions and are usually only able to be viewed from the outside prior to sale. This brings many unknown risks to this type of purchase.
It is far safer to buy the REO’s directly from the Lender or Asset Manager once the full foreclosure process has taken place and title is procured with the Bank itself. Then you can then make the offer with full inspection rights and also demand a Certified Title Insurance Policy at closing from and paid for by the Seller (Bank).
This process is greatly aided with the assistance of a Florida Licensed Real Estate Agent (Realtor) that can help locate and value good Florida Real Estate opportunities. Current select homes are being purchased every day at prices that are sometimes as little as 25% of original sales prices during the bubble years.