What is repossession? Are they worth it??
At the risk of being brutally blunt, the short answer to this question is "NO!"
With all the hype from the United States economy, the flipping house phenom isn't quite as lustrious as one may think. Watching a TV show on A&E about how a "house flipper" buys this amazing foreclosure deal, at an absolute song, fixes it up, makes a cool 20% (on the low end) on the house after expenses and moves to the next one, isn't a common story in Alberta's economy.
On average in Alberta, a repossession or "court sale", sells for roughly 3-4% below a conventionally listed property. which relates to roughly $9-12,000.00 (based on the average sale price of approximately $300,000.00) not a bad thing, but considering the risk involved in actually buying a foreclosure or bank sale, hardly worth the trouble.
In Alberta for 2010, the actual number of foreclosures or bank sales on the market, took up roughly 2-3% of all listed properties. This compared to our dear neighbours in the south with approximately 10% of all issued mortgages in the entire United States were in default status or "foreclosure". A little bit of a difference forsure.
My advice? There are some opportunities in looking for that,"great deal" and there are some foreclosed properties that could turn a quick profit. For the majority of us, who aren't pro's at renovating or knowing full well what "As is, where is means'? stick with the safer bet and stay away from foreclosures!
Until next time........
Posted by Wes Giesbrecht
on March 24, 2011