As the aftermath of the 2008 sub-prime mortgage crisis slowly wanes, so has the selection of Hawaii foreclosed homes available for purchase. Banks know the market has improved and have themselves recovered significantly, so the sale of the remainder of their foreclosed homes has transformed from a race to turn-profits-as-quickly-as-possible to that of an effort to minimize losses on sales. This changing environment of foreclosures has its own share of risks and rewards for homebuyers, so if you are considering the purchase of a foreclosed home, you’ll want to weigh these risks and rewards.
Hawaii Foreclosed Homes Are Still Cheaper
Nowadays, foreclosed homes are priced about five percent below comparable homes in the same location, on average. In previous years, the average was closer to 15 or 20 percent lower, but most of these homes were often in horrible condition. Today, foreclosed homes are typically ready to be lived in upon their sale.
Hawaii Foreclosed Homes Still Have Their Fair Share of Risks
Even though Hawaii foreclosed homes are higher quality today than they were in earlier years, they are still not without their own baggage. Foreclosure sales being ‘no disclosure’ and ‘as-is’ for the most part, you still don’t know exactly what you’re paying for and what you may end up really paying for. In the days when most foreclosure sales were a complete steal, investors could tolerate a substantial amount of risk associated with their sale. Now that the ‘deals’ are gone so investors are less likely to pounce on their purchase. Don’t be fooled by the inventory available, making sure you really weigh the costs of your risks.
Location, Location, Location
It’s important to remember that nowadays, many foreclosed homes are in less desirable parts of town or in less than stellar school districts. Often times what you may interpret as a cheaply priced home should really be taken as a cautionary tale that the area in which it is located has seen better days. Foreclosed homes in good locations will sell lightning fast so you must be ready to act fast.
Banks Aren’t People
Banks don’t care about the sentimental value you may cherish in a home like a typical seller does, and, if you are looking for flexibility in terms or in time, don’t get your hopes up. Your offer is likely to flow through an automated process unless it winds up as a winning deal, and only come closing time is it likely you will interact with actual human beings regularly.
Hawaii foreclosed homes are still priced as-is, and are take it or leave it deals, so they will be slightly lower than market price. Banks read the news and watch the markets, however, so don’t be so quick to jump on every foreclosure deal you see – there may be more to it than meets the eye.