The philosophy of waiting for a foreclosure on Hilton Head or in Bluffton and assuming that it will be at a dramatically reduced price may not exactly be a sound one. The media has announced that there will be a "flood" of foreclosure properties placed on the market that were 'taken back', inventory will be once again overwhelmed and the prices will plummet. Not exactly. Though the lenders have indeed added these back to their portfolios, these are still considered assets. Certainly not at the original value, but assets nonetheless. Experience in our market has shown me that the banks are no longer willing to take dramatic losses, or 50 to 70 cents on the dollar.
Instead, they are also seeing the signs that we Realtors(R) are seeing, that the pluff mud here in the lowcountry is firming up and they are going to be able to recoup some of their losses.
The days of 2011 when foreclosed (REO - real estate owned) homes were generally in terrible shape, missing cabinets, countertops, appliances, light fixtures, terribly soiled carpets, ruined walls, overgrown landscaping, broken windows, etc. are pretty much gone - at least in the Hilton Head Island and Bluffton area. Instead, we are finding that lenders are painting, carpeting, landscaping, adding pine mulch, repairing windows, deep cleaning the homes and putting the homes back on the market very close to an appropriate market value. In fact the foreclosure homes are selling close to 91% of list!
If you're in the market for an REO home, don't make the assumption that the lender will accept a 'low ball' offer or a price dramatically below the market value.