Foreclosure, short sales, developer fire sales and bargain hunting in miami

First let me start by defining what a short sale, foreclosure, or buying from a motivated developer entails and how these might provide a good investment opportunity for you.  The opinions that you see in the upcoming paragraphs are based on my experiences in the Miami/Miami Beach real estate market.

Short Sale

A short sale occurs when a seller owes more to the bank than a buyer is willing to pay in the current market.  In this case the bank approves the sale of the real estate at a loss and the bank absorbs the loss and the seller is freed from the debt to the house.  In these instances you the buyer will be dealing with the seller/owner directly (since the bank has not foreclosed on the property yet) and you will agree on a price as you would for any other sale.  The only caveat is that after the seller and buyer have agreed on the price the contract is then submitted to the bank for approval.  The approval is a VERY lengthy process.  Different banks have different guidelines and will take a certain percentage of what is owed to them.  Generally short sales are going to sell for or just under the appraised value.

Foreclosure

The real estate property in a bank foreclosure is now owned by the bank.  The bank then markets the sale of the property through a real estate broker.  Currently there are a great number of foreclosed opportunities in the market place, all kinds of units, basic, luxury, beachfront, etc.  Generally banks will want to get the real estate out of their books ASAP since every month they own the real estate they have to pay for the expenses and taxes.  Purchasing a foreclosure can be done in as quick as 15 days and you will certainly be getting something for under appraised value. 

Developer Fire Sale 

In Miami the cranes are no longer present in our skyline, which is a sign that developers are fleeing the market at least for the next 3 years.  The developments that have been completed are finishing to sell their inventory.  In many cases people put down 20% down payments on pre-construction units and they are no longer able to close on their unit, defaulting on their deposit.  Buyers that are ready to close can absorb the defaulted deposits and still negotiate the price on the unit further.  In most cases developers are selling at a better price per square foot that a foreclosed property.  The biggest advantage is that you won't have to deal with cleaning the unit and having to get new appliances or having to paint the apartment, developer units are brand new!

Your comments are welcome!  If you have any questions for me feel free to contact me via my cell phone at 1 561 702 2969.

Christian Kawas

Realtor Associate

Douglas Elliman Florida