The market is ripe with foreclosures and short sales right now.  There are some  incredible buying opportunities available, but there are also some big pitfalls you want to avoid. 

Our website http://www.saltlakeforeclosures.com has always provided free access to available distressed sales and bank foreclosures to anyone interested enough to fill out a very short form.  In that time we've helped hundreds of buyers purchase distressed properties.  We've seen great ones, and we've seen some properties that should be avoided at any price. 18 months ago, on average we would see 150-180 distressed sales on the market at any given time-as I write this, we have 683 homes posted on our site.  There are far fewer buyers in the market right now, but it seems they're all interested in these 683 homes. 

So here are a few of the biggest mistakes we see buyers make when pursuing foreclosures and short sales:

1.  Assuming all distressed properties are good deals.  This simply isn't true.  Foreclosures are often in terrible condition. For that reason, banks and the government are often willing to provide majordiscounts on the property's price. Even then, however, the property may not be a great investment.Experienced investors know that just like anything else, finding a good foreclosure property takes time, expertise and research.

Short sales are another issue.  The short sale process can take 4-6 months for bank approval, and the bank won't begin the evaluation process until an offer is on the table.  So listing agents will sometimes advertise a short sale home at aridiculously low price to get offers quickly.  The property can stay on the market as an active listing while waiting for a bank response-even with several offers already submitted.  With short sales,always be skeptical about the listed price if it seems too good to be true because more often than not, when the bank does respond, it's with a price that's higher than the list price.

2.  Jumping into fixer-uppers.  Many buyers are intrigued by the idea of fixing up a property-especially first time buyers.  The idea of making the house 'your way,' and building equity is very captivating-problem is few buyers have the knowledge to back up the idea with facts.  Ask anyone who has done it before-a home remodel will always cost more and take longer than you anticipate.  There's nothing worse than seeing a project run out of time or money before it's done.  Rather than building equity, you've probably lost some because you've left a partially completed project for the next buyer, and they usually won't pay you top dollar for the work you've done.   

3.  Ignoring the rest of the market.  Sure the number of Salt Lake foreclosures on the market right now are much higher than they were a few years ago.  And there are fewer buyers shopping.   But the buyers who are shopping the market right now seem to all befocused on the distressed sales and foreclosures.  We have had several clients this year purchase distressed sales-every one of them had to compete with multiple buyers, and all of them were beat out on at least 1 house before they got an offer accepted.  Patience and persistence are key.  But so is opening up the rest of the market-the other 5,700 homes on the market are getting ignored despite the fact that there are some amazing deals among the 'regular' homes.  It's worth expanding your search to look at both the distressed sales and regular listings to ensure you find the best house, and best deal.  

If you'd like to explore your foreclosure options in this market, register for your free list of Salt Lake Foreclosures today.  You can also contact us at 801-467-7007 or by visiting our website at http://www.UtahHomeTeam.com and ask us to create a customized search for you.