Thursday, March 17, 2011

Real Life Real Estate...New Construction vs. Foreclosure

A hot topic for potential homebuyers is, should I look Foreclosures, existing older homes, or New Construction? The hype lately seems to be on Short sales and Foreclosures. Bank owned properties are being snatched up by cash investors and we hear of bidding wars everyday in Tampa over bank owned properties. Investors have money to spend, and no desire to occupy the property personally, they can fix any issues that arise with no problems. It is very enticing for a buyer to see large discounts foreclosed and short sales but what else does a buyer need to consider when deciding on purchasing a home?

SI Real Estate has helped three clients purchase a new Construction home in the last two weeks. What made these buyers decide purchasing a new home was better than foreclosure and existing home options? There is a great website being advertised by Lennar homes, “Buying a New Home vs. a Foreclosed Home”. This website highlights advantages of purchasing new construction. Buyers need to consider all pros and cons of new homes vs. distressed properties before enduring the long process of locating an acceptable Foreclosed home or short sale, and hoping for the best.

Advantages of New Construction

Affordability- Builder Incentives, Lower prices, and energy efficiency

Timing- Immediate Occupancy or a set time frame you decide upon

Customization- You can add the features you want before moving in and all of it is included in price of home.

Warranties- Any credible builder will provide guarantees or warranties on labor, materials ad structural repairs so buyers can remain worry free.

Foreclosure Information

Florida and Tampa have both been affected by large amounts of Foreclosures for many months. It has impacted the entire real estate market. This could be starting to change however, according to Florida Trend, "For the second month in a row, no Florida cities posted foreclosure rates in the top 20 among U.S. metropolitan areas with a population of 200,000 or more," This is more important once you compare that statistic to projections in 2010 which names 9 metro areas in Florida in the top 20 foreclosures in the country.

There are advantages for certain buyers of short sales and bank owned properties. For instance, for investors with enough cash to purchase and repair the property, a bank owned property could be the best option. All buyers should consider the following precautions when considering Foreclosed properties and short sales. Distressed properties can be very difficult to find financing for. This is not an issue for cash investor and that is why they are collecting so many bank owned properties right now. Another factor to consider is timing, time frames on response and closings can vary greatly for each deal, extremes range from two weeks to two years. Finally, the most important detail to consider in any real estate purchase is knowing the condition of the property. Most foreclosed properties are bought with the understanding there will be no repairs, warranties, or guarantee of their condition.

Buying any property is a big decision, talk to an expert in the area you are considering the purchase. SI Real Estate can help you with all your real estate needs including new and existing homes, and bank owned and short sale properties in the Tampa Bay area. Please call our office at (813)631-5144 or email us at