October 23th, 2010
By Brian Scott If property defaults back to the bank, what is the advantage of buying one of these properties? Doesn't this just mean that nobody wants to pay the opening bid on the property because the house is over-valued? The short answer to this is yes, but the detailed answer is where you can make your profit. First of all, banks are in the money business, not the business of real estate, so when it comes to pricing houses to sell at foreclosure or at short sales they are a ways behind the curve on what the market value of the opening bid needs to be.
As properties increasingly revert back to the banks however, they are slowly starting to catch on. After the banks reaquire these properties they realize that the reason why these properties didn't sell is that they are A) overpriced for the current market, and B) need work done to sell at market price.
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