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SALT LAKE CITY -- As the housing market continues to struggle and employment rates fall, more and more banks are foreclosing on their loans and acquiring many different properties. As the number of foreclosed homes increases, it creates an opportunity for people to buy a home at a significantly lower price than they could have just a couple years ago.
Utah in particular has a large number of foreclosed homes that the banks need to sell as soon as possible to recoup their costs.
According to RealtyTrac, a company that collects data on auction and bank-owned listings all over the country, there were 19,453 foreclosure homes in Utah in July 2011. That works out to nearly 1 in every 373 homes.
Salt Lake County has a lot of possibilities for potential home buyers who are looking for a great deal (whether they intend to flip the house or make it their primary residence). RealtyTrac reported 7,527 foreclosures in the county — 4,139 of which are within Salt Lake City limits. Utah County has 3,484 (454 in Provo), and Washington County weighed in at 2,111 (nearly half of them in Saint George).
Purchasing foreclosed properties has the potential to create good investment returns, as well as improving the possibility of buying a home that would normally be outside of a buyer's budget. However, buyers still need to be extremely careful about their purchases, and the price alone should not be the deciding factor. There are still many things to consider.
When investing in a foreclosure, there are important things that must be examined closely. Purchasing property sight unseen is something that only those with sizeable amounts of disposable income should consider. Take your time and look closely at some of these things and make sure that any repairs or other maintenance issues won’t end up draining all the potential profits.
- Look at the neighborhood. If there are a lot of foreclosures in the area, or the neighborhood has a high crime rate, it will very difficult to turn around and sell the house again. Even the condition of the neighbors’ yards can impact the perceived value of the house.
- Look at the landscape. If the property has been on the market for any length of time without proper maintenance, uncontrolled trees or bushes could contribute to the deterioration of the home. Vines may creep over the house and roots may crawl down toward the foundation. Make sure that someone has been watching the property between owners.
- Look at the underlying structure. Don’t turn on the utilities until an inspection has been performed on the structural components of the house. Check for cracks in the plumbing, any signs of growing mold and even questionable wiring. Not every potential home buyer will have the necessary skills or background to properly judge the quality and value of these components. According to America’s Infomart Inc., a property preservation company in Texas, an independent inspector should be hired to take a close, professional look at the property and give buyers an accurate assesment of the home’s value. Even if someone is new to the foreclosure market, there is still a great potential to get in to a home at a significantly reduced price. Simply take the time to research the property and the market, and be prepared to do a little work to add even more value to the home. ----
Andrew Johnson is a writer, journalist and marketing specialist. He enjoys hiking and skiing, and lives in Salt Lake County with his two kids.
