If you want to find foreclosure bargains in Newark, NJ, it has never been easier. There are many REO’s and pre-foreclosure homes on the market in the area. Or if you are looking to purchase a foreclosure property at a public foreclosure auction, there are opportunities to do so as well.
Here is what is going on in the Newark area. According to Trulia.com, there were 1,457 foreclosures the week ending February 17, 2010 in the Newark area. These were either homes in foreclosure, pre-foreclosure or offered for sale at foreclosure auction. The median sales price for homes in Newark, New Jersey for the period November 9, 2009 to January 10, 2010 was $170,000, a decrease of 12.4%, or $24,000, compared to the prior quarter and a decrease of 24% compared to the same time a year ago. Sales prices in Newark have depreciated 35.2% over the last 5 years. The average listing price for Newark homes was $226,486 for the week ending February 17, 2010, representing an increase of 0.1%, or $200, compared to the prior week and a decrease of 1.5%, or $3,407, compared to the week ending January 27, 2010. Hot Newark neighborhoods are Forest Hill, North Ironbound, Upper Clinton Hill, Fairmount, North Broadway, and Central Business District.
Where to Find Foreclosure Bargains?
Buyers can find foreclosure bargains in Newark, NJ in the following places:
- Local MLS through a Realtor
- Internet websites
- County recorder’s office
- Signs by driving around Newark neighborhoods
- Contacting banks directly
The easiest way to locate a foreclosure property is to work with a local Realtor. Banks give their real estate owned (REO) listings to local Realtors to sell for them. Realtors also list short sale properties, which are pre-foreclosure properties. You may also be able to find a pre-foreclosure for sale by owner property by driving the neighborhoods you are interested in or checking online websites or local newspapers. Foreclosure auctions are published in local newspapers in the counties where the properties are located.
What You Show Know?
If you buy a foreclosure property at a public auction you need to pay cash at the end of the auction if you are the lucky bidder selected. You don’t get any title insurance and are stuck with any liens left on the property as well as former owners or tenants. However, the properties are sold at substantial discounts so if you are willing to take more risks, foreclosure auction properties can be a good deal. Also keep in mind that the properties are sold in an as is condition, you generally don’t get to conduct a full physical inspection and many of the properties have been stripped by the former angry owners. It is not uncommon to find homes with no kitchens, including missing cabinets and counters, and bathrooms with no toilets or vanities. So budget repair costs before you decide to bid on one of these homes. You will get to inspect the home by walking through it, but that’s about it.
When you purchase a pre-foreclosure short sale property, you are dealing with the seller who is the owner of the property, but the sale is contingent on the seller’s lender approving the sale because the purchase price is less than what the seller owes on their mortgage to their lender. They take 3 – 6 months or longer to get approval, and they are also sold in an as is condition. There is no guarantee that the lender will approve the sale though. They are looking at the seller’s financials, and if the seller does not qualify for a short sale or doesn’t cooperate with the bank, the deal can fall apart. In fact, 50% of most short sales do fall apart for either that reason or the buyers get tired of waiting and find another property.
REO’s have the least amount of risk because they have already gone through the foreclosure process and are owned by the bank. The bank has cleaned up any title issues so you get clear title. Also, you can perform inspections and get title insurance. The homes are sold in an as is condition.
Newark foreclosure homes are good investments if you find a home that meets your criteria and don’t need major systems work. Pre-foreclosure short sales are also good investment opportunities if you are willing to wait for the lender to approve the sale.