'Karen Bloggin on the Walls!

Being a Realtor of many years I am growing frustrated with the mindset that Buyers have adopted and in many instances falsely so and that is to purchase a foreclosure is like hitting a gold mine. I shall scream off the walls, not all foreclosures are a gold mine. Now if you happen to be a master contractor and can afford to take on the expenses of updating, building, buying the material in most instances making the home habitable then this may defray some costs for you. Well hey, then sure go for it. However, if these options and your skills as a carpenter have to be outsourced you had better get some honest contractors out there giving you quotes along with your private inspector pointing out each and ever flaw. Make sure you have independent quotes from each and it would be a conflict of interest to hire a contractor who is also a private inspector, in my humble opinion. It is extremely important to weigh your odds, or say costs.

A few questions you need to seriously ask yourself and a few professionals first;

Is the neighborhood depreciating in value? If say, you invest say $30,000 into this dream home that has the potential to become a money pit (trust me I have seen this much to my chagrin) then back away! Over improvement can be just as bad as under improvement. If you add up the costs to make this your dream home, make sure you do your “due diligence” with a Realtor or Certified appraiser. Note trends and statistics of your immediate market. I often hear my clients say in years when the market finally bounces back, we’ll be so far ahead in equity that they will be sitting on a goldmine. Unfortunately, I heard this a few years ago, and many have lost their homes, due to foreclosures brought on by unforeseen circumstances job loss etc. and the market we find ourselves in as well. Some of these had short sales on the market and were lost to foreclosures with Buyers in the rush to foreclosures. It's maddening! Somehow I think that is not the American way, to bypass great homes not realizing that the short sale Seller will be the predicament that “ones” find an excellent deal!

In parting, I remind Buyers to open up to short sales and Seller backed homes when you make a decision to look. Some have owned their home for years and have room to negotiate. Some yes, can bring money to closing to settle their debt. Don't overlook these, investors will, as they often out bid the regular home buyer again and again on foreclosure, they often have deeper pockets. This can be very frustrating in the long haul; my clients who can’t go over a certain price after 10 losses to overbids won’t give up! Some Sellers are offering wonderful deals that are already fixed up, updated etc. Everyone seems to think that short sales take forever. Not true. Get proactive; your agent along with the Seller’s agent and Seller can move this along and in the long run, a great house. More than likely most homes that hit sheriff sales are less than what the short sale home is selling for. When it hits foreclosure and is listed much later (home now suffers damage in most instances) with the REO agent a majority of these agents will of course under price it (sometime ridiculously so) and at the end of the day with overbids voila the winner winds up paying for what it would have sold for at the short sale price, or above it ,,but without all the multiple bids. Only now the taxes are non-homestead because it is bank owned, which the buyer happily or drudgingly pays because they have a deal. It’s like everything else, when we think we are getting deals we keep those blinders on and everyone wants that same great deal when the deal that should be had is often in the rearview mirror. All that is not gold can turn your skin green, but not your wallet if you don’t research your options carefully. Just my two caveats...Buyers beware!