According to Tulia, there are 27 homes that received some type of foreclosure notice in Fairbanks, AK during January 12, 2012 through March 12, 2012. The median sales price for Fairbanks homes during the same period was $153,094. This represents an increase of 7.5% compared to the prior quarter and a decrease of 3.5% compared to last year the same time. However, sales prices overall have appreciated 39.1% during the last five years in Fairbanks.
Purchasing a Fairbanks, AK home foreclosure at an auction is entirely different than buying a home from a lender that is listed with a Realtor as a REO (real estate owned). A foreclosure auction is the last stage of a foreclosure proceeding where the home has been repossessed by the bank because the borrower failed to make their payments and defaulted on their mortgage. The home is offered for sale at a Fairbanks public auction to the highest bidder for cash. Prices are generally discounted way below market value.
An REO is a foreclosed property that the bank bought back because the home did not sell at an auction. REO’s offer buyers less risk because the new buyer is not responsible for paying off liens or evicting former owners or tenants. Title insurance can be purchased and a home inspection can be done to find out the condition of the home. REO’s are also sold at below market prices.
With an auction property, the new buyer is responsible for paying off the liens and evicting the former owner or any tenants if they remain on the property after the buyer obtains title and ownership to the property. Fairbanks foreclosed homes purchased at auctions can be bought cheap, but buyers should investigate the condition of the home and whether it is vacant before making an offer at an auction. Some auction properties can be inspected prior to the auction, while others may not so you should check with the auction company first to determine whether you are allowed to conduct the inspection. All foreclosure properties are sold in an “as is” condition.
What to Look For?
Look for homes that just need cosmetic repairs because homes that need major systems repaired such as new roofs, have structural damage or other expensive repairs will cut into your profit margin and may not end being a great deal for you. Unless you are a contractor or handy with repairing and replacing roofs, plumbing, electrical or heating and air conditioning systems, you may want to stick to properties that just need some painting, new flooring and a kitchen or bathroom remodel.
Check out the area first by having a local Realtor perform a comparative market analysis report for you so you can determine the home’s value and don’t over bid. Just because a home is offered at an auction, doesn’t always mean that it’s a good deal. If you determine that the home is a good deal, then you will want to make an offer. Also decide how you are going to use your Fairbanks home. Are you going to rent it out or live in it or hold on to it until market prices increase?
It’s a good idea to buy homes in areas that have good schools and are close to shopping, entertainment and transportation. Urban areas that are undergoing redevelopment are also good places to purchase real estate because property can be bought cheaper, and there is a good chance that the property will appreciate over time. If you are lucky enough to find a home in a hot neighborhood, you will probably encounter a lot of competition so be prepared. Don’t get caught up in a bidding war though and end up over paying for the property.
Although some buyers are choosing to purchase short sales as an alternative, there is no guarantee that your offer will be accepted by the seller’s bank, and you could end up waiting months for an answer while other opportunities pass you buy. When you make an offer at a Fairbanks foreclosure auction, you will know immediately whether or not your bid is accepted. So there is no guesswork or wasting time. If you don’t get the home, you can bid on another one or wait for another auction opportunity. Right now is a great item to take your money and invest it in a Fairbanks foreclosed home.
Government Foreclosure Homes
VA and HUD also have foreclosed homes that they offer for sale. The government insures these loans so the lenders who make them are paid if the borrowers default, and the government takes the homes back and resells them at auctions. There are some great opportunities to purchase government foreclosed homes very inexpensively because the government is not in the real estate management business and needs to get rid of their inventory of foreclosed homes quickly. You can get had foreclosed homes for as much as 30% to 50% below market value. Homes are generally in poor condition so you need to budget for the repairs. The homes are sold as is. Also other government agencies may have foreclosed, repossessed or seized homes available for purchase at auctions. Fannie Mae is one such agency that acquires homes from lenders who have foreclosed on Fannie Mae guaranteed home loans and also offers them to the public at discounted prices. To find a list of government foreclosure homes, visit the HUD, VA or Fannie Mae or Freddie Mac websites.
Foreclosure homes give buyers/investors opportunities to purchase good qualify homes at low prices and with built in equity. While there are still a number of foreclosure opportunities, they won’t last forever so you should take advantage and buy Fairbanks foreclosure auction homes now.