The Pros and Cons of Foreclosures in Miami Beach

December 8th, 2009

The foreclosures in Miami Beach can be divided into three stages. This applies to all foreclosures in general. These are pre-foreclosure, foreclosure and post-foreclosure. For any potential purchaser it is important to know about these stages. Each stage has its pros and cons and knowing these will enable the buyer to fit into his or her preferred niche.

The first is the picking of the stage with which one is comfortable. For example if the buyer is not conversant with the auction method one might take the pick from either the pre-foreclosure or foreclosure stage (bank repossessed houses). Nevertheless in each stage there are disadvantages for which the buyer must be prepared.

In the pre-foreclosure stage there is still some equity left on the houses of the sellers to make it eligible for short sale. This process is time consuming and takes up more time than when one is buying in the conventional way. It requires the green signal from the lender for the sale to kick off even at the initial stage. Many of the buyers find it emotionally difficult to tackle because the dealings have to be done directly with the occupant owners who are going through a financial crisis involving the very roof above their heads.

But at this stage foreclosures in Miami can turn out to be bargains. One of the prime causes for this is that the price is extremely affordable and can quickly become a lucrative investment. The seller also benefits from taking away at least some amount of cash.

In the foreclosure stage the property in all likelihood has already become the property of the lender – mainly the banks. There is the disadvantage for the potential buyer if one is not conversant with the auction bidding hysterical frenzy. One can be overwhelmed and spend more than planned. It is also possible that inspection might be overlooked. Here again properly handled there are bargains to pick up as in the pre-foreclosure stage. The plus point is that here there are no emotional issues at stake to perturb the buyer.

If the houses are not sold during the auctions then it reverts back to the lender. The latter now sells it via the MLS listings as REO houses. Here again the chances are good for picking up real good bargains from this market. It is wise to pick a lender who has at disposal innumerable houses that are proving to be heavy dragging weights. Because these houses are non-performing the lender would be eager to dispose of them at very low rates and clear their books.