- 4 Beds
- 2 Baths
- 1,790 SqFt
Foreclosure homes for sale in the Tucson area vary in quantity, size, location, and condition of each individual property. Working with us as your Realtor allows you to capitalize on our extensive knowledge base and experience, with over $100,000,000 worth of homes sold. We (Michael and Heather Oliver) have also personally purchased and rehabbed these types of homes and do it as a side hobby/business. We know what to look for and how to help you determine the right foreclosure homes for your wants, needs, and budget.
Search for Foreclosed Homes
for Foreclosed Real Estate Market
In the current for Foreclosed homes for sale, the highest price home is listed at $190,000 with the lowest available home listed at $190,000. The current average price for a home in the for Foreclosed real estate listings is $190,000 with a median price of $190,000. for Foreclosed homes for sale range in size from 1,790 Sqft to 1,790 Sqft and sit on lots that average 0.70 Acres in size. for Foreclosed properties appeal to a wide variety of home buyers and are some of the most popular homes in the Pinal" area.";
What is a foreclosed home?
A foreclosed home is a home where a mortgage (or Deed of Trust) was used to purchase the property and the borrower has failed to make timely mortgage payments. In Arizona, after 90 days the lender can file to have the home foreclosed on. Within 180 days, they can regain control of the property via sheriff's auction/sale.
Foreclosed homes in Tucson are called by many different names. Below is a glossary of terms used to describe a distressed property.
Foreclosed Home. This is a property that has gone through the foreclosure process and is not being sold.
REO. This stands for Real Estate Owned and it means that a bank or financial institution now owns the property as their own. The home has gone through the foreclosure process and the bank declined selling it at the foreclosure sale held at the county courthouse.
Trustee Sale Homes. These are homes that are scheduled to be auctioned for sale at the county courthouse. You can buy homes at trustee sales, however, you should enlist the help of an expert so you know exactly what you are buying.
Pre-Foreclosure Homes. These are homes for which the owner is more than 90 days late on the mortgage. The lender has filed to have the home foreclosed upon. Once the lender files to have the home sold at auction, usually a trustee sale date is arranged.
Deed-in-lieu. This is where a mortgage borrower who is behind on their mortgage essentially gives up rights to the property and gives the deed back to the lender in lieu of foreclosure. These homes can be re-sold by the lender.
Foreclosure Homes at Auction. Some lenders don't want to go through the process of cleaning out homes and getting them ready for sale. They just want them sold. They will allow the homes to sell at the Sheriff's Auction (also known as Trustee Sale) or they will take them to a different auction where they will sell off many homes all at the same time. These sales almost always require cash ready to go within a few days, and there is very little to no disclosure about the property other than the basics in the public record.
For purposes of this page we will not go into all of the legal concepts behind foreclosure but those can be found here: https://en.wikipedia.org/wiki/Foreclosure. What we will focus on is how to buy distressed homes and how almost any buyer can save significant money on a home or real estate investment by looking at the foreclosed home space in the market.
Who are foreclosed homes best for?
- Home buyers who understand that to get a great deal on a home or property you will need to be willing to repair or rebuild the property to make it desirable again.
- Real estate investors (especially small scale investors) who understand how to buy low, repair, and then rent and hold or sell at a profit.
In almost all cases, foreclosed properties present opportunities to buyers who understand real estate dynamics and the marketplace. Foreclosed homes are somewhat risky to buy as many need repair, have functional issues, and lack normal disclosures (you may not be able to see what problems the property may currently have).
We (Michael and Heather) have purchased foreclosed homes previously and have a great deal of knowledge regarding how to successfully buy them.
The key to making a successful purchase of a foreclosure property is to buy at such a low price that there is no to very little risk of losing money. Banks, simply put, have a hard time understanding the real estate marketplaces of each foreclosure, and each market is constantly changing.
How do you get below market prices on foreclosure homes?
Evaluating foreclosures can be difficult at first. In some situations, the lender will make repairs to make the home look more attractive. In some cases, new carpeting, paint, appliances, and other repairs are made to try to get the property to sell for the highest price possible. In other cases, lenders simply want to get as much money back as possible as quickly as possible and list the homes for sale. In those situations, they sometimes under-price the home, and other times, they overprice it.
Since foreclosures are vacant, they sit on the lender's books not providing any income and leave the lender with considerable costs in taxes, repairs, and upkeep. The cost of holding them can mount, and lenders try their best to sell them quickly. In many cases, the banks do miss-price the homes and will sell certain homes below value. As a buyer, you will need to watch the market carefully to find these properties ASAP. An experienced Realtor who knows foreclosures can be a valuable source for locating these homes.
The other place to find below-market distress sales are homes that have been on the market for a long period of time that the bank simply wants to sell. These homes are hard to evaluate as everyone in the market has overlooked them or decided they were not good buys. In our experience, however, these homes can represent some great opportunities. Many banks will reduce prices to levels that are drop-dead excellent values. We (Michael and Heather) have purchased foreclosure homes in this bargain bin of old inventory foreclosure distress homes and found great pricing within it.
How do you get foreclosure homes fixed up?
In our experience, this is the number one reason foreclosed homes sell for below-market prices. Most buyers do not have the money to repair homes, and even if they have the funds, they lack the knowledge to properly assess the requirements to turn a diamond in the rough of a home into a show house. We know the contractors well. We can help you get bids, and assist you in discovering the options that may be available to you. Most foreclosed homes that have been lived in within the last year generally require cosmetic repairs and light maintenance. Other properties can sell at such discounts that all the repairs can be completed and still not cost anywhere near the price of other homes of the same size and style in the same neighborhood. Proper evaluation is required to make sure you know what you are getting.
How to make a foreclosed home work for your real estate investment portfolio.
We suggest that anyone looking to make investments outside of the stock market look to the property markets for diversification. It is not that difficult to start with one properly purchased single family or small multi-family foreclosed property, fix it up, rent it for a good return and then repeat. In five to twenty years as an investor you should have a stable rental income with multiple properties that is sheltered from the ups and downs of the stock market. It's a great source of income for retirement.
In our experience, some of our wealthiest clients derive a large amount of their wealth via property investments. There is a lot to be said for being able to see, repair, and manage your own physical piece of property. You can understand exactly what is going on with it and the surrounding neighborhood.
Purchasing investments in downtrodden neighborhoods that are becoming more demanded, buying multi-family properties that have had horrible management, and buying land in places where growth is on the way are all places to look for better than average real estate investment returns. Typically, in down markets these classes of properties will have foreclosures all over the place able to be purchased at rock bottom prices. Personally, we have also done extremely well with foreclosure home investing having bought, repaired, and rented foreclosed homes in high-end neighborhoods while the market was bottoming in the last down real estate cycle.
Do foreclosed homes make good primary family residences?
We personally think they do, especially when a highly desired neighborhood or school district is almost out of reach for a buyer and his/her family. Foreclosures make more sense than ever in that situation. Foreclosures or distress homes almost always do require from a little to a lot of rehabilitation, however. For that reason, most buyers pass them over. Since most buyers are not interested in these types of homes, especially those in need of serious repair, the prices are can be much lower than otherwise. (Just as we mentioned in the investment section.) With the right plan and some budgeting, many issues that seem like big deals can be repaired or just cleaned up to make the home comfortable while you save for the large-scale updates of kitchens and baths. New paint doesn't cost a lot, and in fact, any home you buy you will probably need repainting anyway. New appliances are not all that expensive when bought on sale. New carpeting can be purchased for, in many cases, under $300-$400 a room, and tile floors can clean up to like-new condition with the right process. Exterior landscaping can be rejuvenated and/or trimmed back without much cost as well. As you can see, the options are unlimited so long as you have the minimum budget and desire to turn a not-so-appealing foreclosure into a decent, comfortable home within the first 90 days. From there, saving for the larger repairs allows your home to be completely transformed within just a few years. In many cases, you will gain significant equity (and pride) in the experience.
Where is the best place to find a foreclosure home for sale?
As previously mentioned, there are a few places to find foreclosed homes for sale. The main places are as follows:
- County Courthouse. This is where the actual trustee sales take place. The homes are auctioned to settle the debts owed on them. The highest bidder gets the home. Since there is a tremendous amount of risk in buying these, as well as the fact that you need to pay cash, the buyer pool can be low causing prices to not satisfy the debt. When this happens the bank usually steps in and will bid up the price to protect themselves from losing more money on their bad debts then necessary. They then take those homes and try to resell them in the retail real estate market (MLS).
- Bank Auctions. These auctions are a bit different from the standard trustee sales. At these, the banks have already gone to the trustee sale and protected their interests by being the highest bidder. They have taken the house back, cleaned it up, and are trying to sell the home (and usually many other homes) at an auction. Most of these auctions happen in Phoenix. They have more favorable rules for buyers, allowing them to inspect the homes and know exactly what they are buying. Prices here are usually higher than the trustee sales -- and in some cases, far higher -- when multiple buyers attempt to buy the same property.
- MLS. While some homes do sell to the public and investors at trustee sales and public auctions, probably at least 50% of all foreclosures sell via the traditional method of the local Realtor MLS. The reason is twofold. First, buyers get the most information and an opportunity to know what they are buying and the condition of the property. When buying a foreclosure, this is not a small thing to consider. The other reason is that it exposes the foreclosure to the most buyers.
In our experience, most buyers simply pay too much for the average foreclosure. When we take on a client looking for a distress property/foreclosure, we advise that all foreclosures have extra risks associated with them and the pricing you get should reflect that risk. Many buyers and other Realtors look at foreclosure homes the same way as an owner-occupied property and will look at both as equal.
In our opinion, the best place to find a foreclosure is wherever you feel you can get the least amount of risk and the most upside. If you are a professional real estate investor, the Trustee Sale maybe your best bet. If you are looking for a personal residence and want a great value, we recommend the MLS as this allows you to dig deep into what you are buying as you probably won't be able to afford making a mistake.
If you would like to learn more about finding a great foreclosure for investment or personal residence, contact us today. We are honest, experienced, knowledgeable Realtors who understand the foreclosure and distress real estate segment extremely well and can be a wealth of information for you on your new home purchase.