Mesa, AZ has been attracting buyers/investors to the area because of the numerous opportunities to purchase budget real estate at foreclosure auctions. According to RealtyTrac, there are approximately 1,859 trustee sales in Meza. There are 13 government owned foreclosure properties available, and 1,749 bank owned REO properties. If you are looking to purchase a home in the Mesa area, you will find a large selection of homes in some state of the foreclosure process. With so many homes being offered at budget prices, it is a perfect time to consider purchasing Mesa foreclosure properties.
Mesa Market Snapshot
Trulia.com reported that the average price per square foot for a Mesa AZ home was $942 for the period June 12, 2012 to August 12, 2012, representing an increase of 999.9% compared to last year the same time. The median sales price for a Mesa home during this period was $150,000 based a total of 2,882 home that were sold. Compared to last year the same time, the median home sales price increased 45.3%, or $46,770, although the total number of sales decreased by 10.5%. The average list price for the week ending September 19, 2012 was $207,797, which is an increase of 0.3%, or $584, from the prior week. The average list price for the week ending September 19, 2012 was $207,797, which is an increase of 0.3%, or $584, from the prior week.
When you purchase a foreclosed home, you are getting an opportunity to purchase a home anywhere from 20% to 50% less than the current market value. With opportunities like that, it is no wonder that so many buyers/investors have been taking advantage of the current favorable buyer’s market conditions.
Foreclosure Process
Arizona is a state where foreclosures are conducted by trustee sale, which means no court approval is necessary. Most homes are sold at foreclosure auction to the highest bidder for cash. The total foreclosure process can take up to year depending on how many properties the lender has started foreclosure proceedings on. Lenders are backed up because so many people have defaulted and continue to default on their mortgages as a result of the economy and job losses that they are unable to foreclose quickly. Also, lenders and borrowers are constantly negotiating to work on solutions so that the borrower can stay in their home. When all negotiations or possibilities have failed, the lender forecloses.
Tips for Bidding at Auctions
Foreclosure auctions have become popular places to purchase bargain homes. If you are interested in bidding at a Mesa foreclosure auction, here are some tips:
- Check home prices in the area first so you know what amount to bid
- Drive by the home if possible to determine whether it is vacant and to check out the neighborhood
- Have your cash available to purchase the home at the auction
- Check the title to determine if there are any liens because the new order is responsible for paying them off
- Make sure you verify the sale date because the dates frequently get postponed or cancelled
Buying a home at a foreclosure auction gives you an opportunity to pick up a bargain property. However, there are some risks in purchasing a home at an auction which include the following:
- The new owner is responsible for paying off liens and evicting owners or tenants from the property
- No title insurance is available
- Homes are sold as is
- You may not be able to inspect the inside of the home
If you conduct your due diligence and inspections, this reduces your risk factor. Keep in mind that buying a home at a foreclosure gives you a high rate of return on your money when you go to sell because the homes are purchased at a substantial discount. So you are basically getting a property with built in equity.
REO’s and Short Sales
For those new investors or first time buyers, you may want to stick with purchasing REO’s or short sales because:
- They offer less risk
- You can inspect them
- You don’t need cash to purchase
- Title insurance is available
- Homes are delivered vacant so you don’t need to worry about evicting anyone
There is a lot of competition for REO’s and short sales, and you may find yourself in a multiple offer situation. It’s a good idea to work with a local Mesa Realtor when you are buying REO’s or short sales because Realtors are familiar with the inventory in their area and home prices. The Realtor can save you time finding the right property, give you information about current home sales and negotiate the offer for you.
In fact, when making an offer on a REO, you must use a Realtor. The reason is banks give their REO listings to local Realtors. All offers are first presented to the listing agent who then presents the offer to the bank on your behalf even if you use your own agent. REO’s and short sales are also good values because they are sold at discounted prices as well. Short sales tend to be in better condition than REO’s and foreclosure auction properties because frequently the owner or a tenant is still living at the premises maintaining the property. Short sales may take longer to close because the owner must get the lender’s permission to sale the house, as the lender has to write off the difference between the sale proceeds and what the owner owes them.
Mesa auctions, REO’s and short sales are great opportunities for you to increase your property portfolio and long term wealth. Investing in foreclosure properties is a smart investment strategy and that is why so many buyers/investors have been taking advantage of the Mesa home market and purchasing foreclosure bargains. With so much affordable inventory, there is no time like the present to purchase a Mesa foreclosed home.
