How to Buy a Foreclosed Home in Fountain Hills
The current turbulent economic conditions have hit homeowners throughout the United States pretty hard.
In fact, more than 2.3 million U.S. homeowners faced foreclosure proceedings in 2008 - an 81 percent year-over-year increase. Additionally, approximately 860,000 homes were repossessed by lenders that same year.
While foreclosures were seen across the country, a small group of states seemed to drive the overall increase. Among these states was Arizona, where by the end of 2008, the foreclosure rate in Arizona was 27 foreclosures for every 5,000 housing units. In contrast, the national average was a mere 11 foreclosures for every 5,000 housing units.
With so many foreclosed homes on the market, more and more homebuyers are considering purchasing a foreclosed home in the hopes of scoring a deal - some real estate experts estimate that a homebuyer could save 25 percent or more on a foreclosed property.
About Fountain Hills
One of the best locations in Arizona to look for foreclosed homes is the small town of Fountain Hills.
Tucked between the city of Scottsdale and the Fort McDowell Indian Reservation, Fountain Hills is home to approximately 25,500 residents. It also is home to the world's fourth tallest fountain, hence the name Fountain Hills.
The town is a popular destination for retirees, boasting a median age of 48. In fact, Fountain Hills was named one of the "Best Places to Retire" in 2008 by U.S. News and World Report and is among one of the "Best Places to Live" in the Valley, according to Phoenix Magazine's 2009 ranking.
In recent years, Fountain Hills has experienced significant growth. According to the U.S. 2000 census, Fountain Hills was the eighth fastest-growing city in Arizona between 1990 and 2000. The town expects this growth to continue, projecting its population to increase beyond 34,000 by 2030.
However, as with many U.S. cities that have seen rapid growth, Fountain Hills also has felt the recent collapse of the real estate market pretty sharply. The number of foreclosures in Fountain Hills is about average for the Valley - 1 foreclosed home for every 128 housing units in May 2009.
The median home price also has hit a rough patch, falling to $287,800 in April 2009 - a 24.6 percent year-over-year decrease.
Buying a Foreclosure: Where to Look
Buying a foreclosed home is a unique process that is very different from purchasing a regular home. When shopping for a foreclosed home, a homebuyer first should know where to look. There essentially are three ways in which a homebuyer can buy a foreclosed home.
The first option for homebuyers is a pre-foreclosure property. A pre-foreclosure home is one that has not yet been handed over to the lender and still owned by the original homeowner.
The second option is a foreclosure auction. Foreclosure auctions typically yield the best deals but are considered to be the riskiest of the three options. For this reason, auctions generally are best for real estate investors versus those looking for a place to call home.
Finally, the third option is a real estate-owned property, or REO. A REO property is one that is lender-owned and is marketed by a broker. Purchasing a REO home is considered to be the least risky of the three options because lender-owned properties tend to be in better condition.