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Foreclosures in Alpharetta, Milton, Roswell, Sandy Springs and Johns Creek
By Ryan Ward | June 19, 2008
Somebody’s Got To Say It!
A lot of the buzz for buyers these days is centered around the foreclosure homes for sale everywhere and while it may at first seem like there are some real “deals” to be had, there are some things you should know to level your expectations with reality. Contrary to popular belief, you are at least as likely to find resale homes that are at least as good of “deals” as anything that you can find as a foreclosure for a number of reasons. If you are in the market for a home and think you are going to find the next news making deal of the century, you might take a few minutes to read this post before venturing into the foreclosure market.
The reality is that many of the buyers in the market think that banks are giving these things away because they are desperate, well quite frankly, you’re not getting the whole story or at best, you are allowing your hopes get in the way of some of the more fundamental realities that exist in the market. In years past, you might see a foreclosure and offer well below asking price and find that they would just want to unload the property to get it off of their books. It’s not exactly the same anymore and there are a number of reasons why. Before I go into why, let me give you some statistics that support what I am saying because that is probably what you are looking for anyways and if you are still interested in learning why this is the case, you can read on.
It is very unlikely that you are going to buy a foreclosure for less than 95% of what the list price of the home.
Let me repeat that in other terms. Don’t waste your time making offers on foreclosures unless you are willing to pay close to what they are asking. Got it? OK good. I’m not here to try suck you in as a buyer and then lay it out for you. You should know before you begin that the likelihood to walk in with an offer for 80% of asking price and you walk away with the keys is just not going to happen so I’m really doing you a favor here.
Here are the real numbers. Arm yourself with the facts so you don’t end up frustrated later.
Roswell, Alpharetta, Johns Creek and Milton Foreclosures
- Since January 1st, 2008 there have been 164 foreclosure sales in these cities. They range in price from $120,000 to $1,550,000. The average list price to sales price for all of these foreclosures is 95%
Taking that a little further, you might think that the more expensive ones might offer better deals, but that is just not the case.
- Foreclosures in North Fulton above $500,000 - there have been 44 sales and the average list price to sales price for these is 95%
Many sell for full price with multiple offers and some sell for more than full price so please understand the realities of the market as they actually are rather than relying on news reports from sources that are dealing with less than accurate information.
The truth is that the best deals in today’s market are found in the free and open resale and new construction markets from homeowners and builders who have equity and for whatever reason need to sell.
OK so how about foreclosure in Sandy Springs? Might we find some better luck there? Well, no. This is going to be the same no matter where you look and the reason has to do with what the banks must have as required by law as far as their liquidity is concerned. Many banks are precariously close to the legal minimum limits to remain solvent so if they just start throwing away these foreclosures just to unload them, they might go under. Basically they are caught between a rock and a hard place. You bet they would like to unload these properties, but, just like many other people in the market, they are basically upside down and The Fed sets limits for them here too so they just can’t unload them.
They are however utilizing a different strategy to sell them than they did in years past in that they are actually pricing them competitively now and often times under market value.
As with anything else, it’s best to arm yourself with the facts before you head out on your house hunting ventures. It’s very important to have correct expectations of the market as the market indicates based on real facts rather than on what you heard. Remember, as professionals we as agents deal with these issues daily and it’s our job to know best how this process works.
Edit
Just in case you are interested, here is a link to the closed forelcosures in North Fulton.
Category: Atlanta Real Estate |
Hello and welcome to my Atlanta real estate blog. My name is Ryan Ward and I run The Ryan Ward Group at Keller Williams Realty Consultants. Stay informed with information on neighborhoods, market statistics, homes and editorials on local, regional and national news that affects all of us here in Atlanta and elsewhere. If you have any questions about what you read or would like additional information, please fill in the form below or give me a call at 404.630.3187.
June 21st, 2008 at 2:48 pm
Great post - too many people assume foreclosures are great deals. Some might be, but they will be in the minority. Besides what you stated about prices, people need to understand that these homes are sold as is and there is no disclosure regarding the condition of the home.
June 21st, 2008 at 3:44 pm
Its true not all foreclosures can fill up your pocket. One has to have some good advice from a trustworthy professional
June 23rd, 2008 at 9:12 pm
Ryan:
It’s good that you point out foreclosures do not have to be purchased at 80% to attain 20% in equity. They may very well be priced 20% below market to begin with. As a local bank director, I can speak with confidence that banks are pricing property to move fast and paying full price can sometimes land you 205+ in instant equity.
Keep up the good work of educating the masses!
June 23rd, 2008 at 10:17 pm
Thanks Brad and congrats on growing the office. I don’t know two of them, but, I’m sure Kevin will be a great addition…
July 3rd, 2008 at 2:14 pm
I wish that it was possible to get the excellent advice contained in this post assimilated by the overseas buyers we deal with here in Florida. Skewed publicity has convinced many that foreclosures are the only way to go and I’ve seen some recently who are as careless in buying (e.g. making offers sight unseen on Florida property, via the internet, while sat in the UK) as they were a couple of years ago at the height of the frenzy. Lowering expectations is definitely required!
July 3rd, 2008 at 11:23 pm
Thanks for saying this! I am so sick of buyers coming in after staying up to late to watch infomercials asking how they can buy forclosures for pennies on the dollar. While I know sometimes you can get a good deal with forclosures I have found pre forclosure to be much more profitable then post forclosure when dealing with a bank.
July 4th, 2008 at 3:07 am
Ryan spot on with this post. We are seeing people with totally unrealistic expectations in Austin as well about what they should expect with these properties. One thing we also tell people is that a lot of the foreclosures are concentrated in areas that have the worst appreciation rates. Also people talk about how they got 20k in equity without realizing they also have 20k in repairs.
July 4th, 2008 at 9:42 am
Thank you for this article. I just recently purchased a home in Stone Mountain. This foreclosure crisis will stop if people plan and are more diligent. Lose the car if you must, but keep your house. Thanks for a great and inspiring article.
July 5th, 2008 at 2:17 pm
Great Blog! I have been selling real estate in Bend Oregon since 1981 and find it refreshing to find a helpful blog like yours! Keep up the good work!
July 9th, 2008 at 11:54 am
While there are some good deals on foreclosures, I agree that you’re going to pay 95% of the list price for most of them. I’ve sold a couple recently that went for more than the list price and had several offers on them. Investors usually win the bidding war, (no contingencies, close quick, all cash).
But if the foreclosures sit on the MLS for a while, the banks will reduce the price and/or look at lower offers. I’ve seen a few go for well under what they started at.
July 13th, 2008 at 11:03 pm
Ryan-
Great info, thanks for sharing! As noted in a couple other comments though, sometimes the price in the MLS has already been reduced before the sale…not sure if your list-to-sell numbers take that into account or not.
I just closed a short sale deal and I was most surprised at the incredible length of time the banks sat on papers before approving the deal. Buyers were squeaky clean, 750+ credit, no contingencies, offering 94% of asking price, and the (2) banks took 2 months to sign off on the deal.
The point is the same — foreclosures and short sales are not as easy as infomercials make them out to be, so be ready for a roller coaster!
July 14th, 2008 at 7:43 am
Michael,
The point is that once the properties are listed correctly for their condition (not necessarily the original list price), they are moving and rather quickly at that point. Buyers that want to jump in willy nilly without first ascertaining the real market value, are really the ones who need to read this.
July 14th, 2008 at 6:19 pm
Well said Ryan. And well founded on stats as well.
I also saw a similar trend in our market. A client of mine called me to ask for foreclosures that he could steal, when I went and checked out the numbers, at that time, it really didn’t make sense.
But I have to say foreclosures that are in the market are priced very competitively. Partly because of the climactic increase of supply this year: http://www.renohomeblog.com/reno/2008/07/foreclosures-in-renonv.html
Thanks for well said insight.
July 16th, 2008 at 9:05 pm
Michael,
I can agree, people going around at submitting low ball offers in the hopes of getting rich quick. This is not going to happen with foreclosures, now if you find someone with equity that needs out of their home is another story.
July 17th, 2008 at 6:25 am
Very true indeed most of the people allow their hopes get in the way of some of the more fundamental realities that exist in the market. Very significant information for the people who are gone mad about the foreclosure market but I am sure after reading your numbers such as 97.5% which is a fact indeed they may well understand the reality.
August 3rd, 2008 at 2:01 pm
Great info Ryan. Thanks for continuing to educate buyers on the reality of the real estate market.
Locally in AZ, the “deal” is the asking price on many of the foreclosures out there. In the past month I’ve had 2 buyers go over asking price to secure the deal, and the home price still was a great value. Banks really are pricing the foreclosures to move now.
By the way, I finally found a mobile notary in Atlanta for the Braves player purchasing a home here. If you need her contact info let me know. She was really professional and had to jump through a lot of hoops to get the signing done.
Cheers
August 22nd, 2008 at 10:52 am
Hi Ryan,
Great information. As an investor transitioning into becoming an agent, I definitely agree with a lot of points your post. In the shortsales I’ve been working, the BPO’s are coming back so high the homes are just sitting on the market. The agent I am working with is having a heck of a time getting buyers to a property that 18 months ago would have been under contract in 3-4 days.