A Look at the Sarasota Foreclosure Market

For people who envision a “steal deal,” the Sarasota REO market has become hugely attractive.  REO, or real estate owned, is the name for foreclosed properties. Even as the market dramatically fell in late 2008-early 2009, REOs attracted large numbers of viewings and offers; cars of agents and investors could be seen lining a street the moment an REO came on the market.  Bidding wars became common. 

Many first time home buyers who relied upon financing to buy a home were losing out to cash-wielding investors in the early days of the crash.  As a consequence, a number of lien holders have imposed offer restrictions in order to level the playing field.   

Since most REO listing agents do not work directly with buyers, agents who have experience with REOs are a great asset for a buyer.  They not only facilitate access to the properties, but are knowledgeable about the necessary specific terms and contracts required to accompany an offer, including the buyer’s proof of funds,  which must be submitted at the time of the offer.    

Currently, about 5% of all real estate listings in Sarasota are REOs, and half of those are listed below $100,000.  They range in price from $29,000 to $1.9 million.  With a limited supply of REOs available at any moment, and with public perception that REOs are best value, sales happen quickly and REOs can close quickly.

Are all REOs a great buy?  Of course not.  Location, location, location holds as true when buying an REO and the condition of the properties varies greatly.  Certainly anyone considering the purchase of an REO needs to have  home and WDO (wood destroying organism) inspections, and a survey is highly recommended. 

But with property values as low as they are right now, combined with low interest rates, it is a perfect storm of opportunity in the Sarasota REO market.