Naples Florida Foreclosed Properties
Foreclosures in Naples Florida
Approximately 15% of homes listed for sale in the Naples area are
either foreclosures or short sales (short sales, are when
the value of the property is less than the mortgage amount owed to
the lender). Foreclosed properties exist throughout the Naples area,
but are concentrated mostly in workforce communities (such as Golden
Gate City and Golden Gate Estates which account for one-third of the
foreclosures).
Foreclosures in desirable second home communities appear sporadically, and if priced at foreclosed values, can turn out to be a really good buy. They do not last long
Foreclosures are Sold "AS IS"
If you are thinking about a second home purchase, and want to focus on foreclosures in a desirable Naples second home community, then your choices will be few, and you better bring along your hammer, nails, paintbrush and work crews. Appliances have usually been stripped out by the foreclosed owner, along with any fixtures of value.
Foreclosure are usually in disrepair, they are owned by
the “bank.” Mr. “Bank” has never stepped in the property or looked
at it. All the bank knows is that they are stuck with it. The
properties are sold in "AS IS" condition, meaning repairs that would
typically be the responsibility of the seller will not be made. The
buyer is accepting the property, in its "as is" condition.
The buyer still has the right to inspect the property, and can cancel the agreement within a certain timeframe if the extent of discovered repairs are over and above what was anticipated.
If you have the time and sweat equity to bring a foreclosure back to good order, then purchasing a foreclosure could be a very good value. In some cases a foreclosed property can be in very good condition, particularly recently built properties, purchased by investors at peak pricing.
View a List of Naples Foreclosures for Sale
This is a partial list of Naples foreclosures for sale. When you follow the link, you can click on the property's address for a map of its location. And also click on the property's tax id for its purchase history. You will often see that the property's previous purchase price (prior to the bank's price) to most likely be double the selling price
.
Review Naples Foreclosures - Click Here
Short Sales
A short sale is when the home's value is less than the mortgage amount due a lender and the lender has agreed to accept less for payment. The lender is not involved with picking the listing agent, setting the list price, paying expenses or anything else. But the lender must approve the sell, that is the extent of their involvement. Industry experts estimate that only 15% of short sales actually sell, the rest end up in foreclosure.
With short sales, the seller does not care what the property is listed at, because at closing they get nothing back. Let's say for example, a property's value is $400,000, the seller and agent could list it for $400,000, $300,000 or $200,000.
If for example it is listed at $200,000 and offer comes in for the $200,000 it is then sent to the lender for their approval. The lender will order two appraisals of the property. If the property appraises at $400,000, then the lender will accept an offer in the $400,000 price neighborhood. This process usually takes four to six weeks. And during that time, the agent will continue to submit other offers that comes in on the property.
So in this example a buyer puts an offer in at $200,000, the full list price, hoping to purchase. And then finds out four to six weeks later the lender wants $400,000. In the meantime, several other properties the buyer had interest in the $200,000 price range, have been sold and are no longer available. And the buyer has had their deposit tied up in escrow.
The exception is when the short sale is listed at a bank pre-approved price. In other words the four to six week process has already occurred with a previous offer that was turned down, so the bank then knows what it is willing to accept. If a buyer submits an offer less than the bank approved list price, then there is usually a lengthy wait for any type of response - which usually will be NO.
With a short sale, neither the seller or the listing agent cares what the property sells for, just that it sells. If it sells in a short sale then the seller avoids foreclosure, and does not get their credit score dinged. If it forecloses, then the bank picks its own listing agent to get it sold, and the original seller's listing agent get no compensation for their effort.
Foreclosure vs. Short Sale
| Foreclosure | Short Sale | |
| Who Owns the Property | Bank | Seller |
| Who Selects the Agent | Bank | Seller |
| Who Selects the List Price | Bank | Agent/Seller |
| Who maintains the property | Bank | Seller or Nobody |
| Who is paying utilities | Bank | Seller or Nobody |
| Who Pays Back Fees and Taxes | Bank | Buyer |
| Response Time | Quick | Delayed or Never |
| Likelihood of Selling | High | Low |
If a buyer is not willing to wait at least four weeks to hear back on an offer, then there is no sense in submitting an offer on a short sell. Once again the bank does not own the property, but must approve the offer that gives them less than what is owed.
This concept is difficult to understand for most buyers. Because it does not fit the procedure that most buyers are accustomed to. That is, an offer is submitted to the seller who had set the list price, as an indication of what they would accept for a sale. And good faith negotiations occur based on that list price.
With a short sale, the list price is meaningless, as the list price on a short sale has not been set by the party that must approve the offer - the lender. So an offer needs to be submitted based on an reasonable assessment of the property's true value, regardless of the listed price.