Home buyers have are beginning to see the allure of saving money purchasing foreclosed homes. How much can you save? Often sellers are limited by banking regulations for short sales. However, expect to pay between $10,000 and $15,000 less than the appraised value of the home; a buyer can save tens of thousands of dollars on the purchase price. However, realtors warn you may need to invest into home repairs.
Charles Durking of Harmony Real Estate outside of Atlanta reports there has been a rise in short sale home buyers in the last few months. “There are many opportunities for buyers right now if they are willing to invest money in minor repairs,” he explains. “The problem is that many buyers of short sale homes do not have the appropriate expectations. Buying a home $50,000 less than the appraised value is not going to happen.”
Do your homework before submitting a bid is your first best step forward. Next, learn about the market. Too many buyers are ignoring the value of selecting the right neighborhoods such as near schools and parks.
Mr. Durking suggests doing the typical drive-by to find areas with promising growth opportunities. Then evaluate the workmanship of homes up for short sale. Too many homeowners in the last few years have tried to do repairs themselves, or worse, hiring unskilled laborers to make fast repairs. Expect to find poor quality when you start looking at foreclosed homes. Often you will find shoddy work and improvements abandoned.
Another concern for smart home buyers is if there is water damage. Tour the outside of the homes to inspect exterior water damage to the siding. Many local roofing companies have grown adept at offering homeowners facing foreclosure discounted repairs that come with very little expertise. Look in the basement for water stains, especially on the walls. Often flash flooding or spring time snow melt causes many basements to suffer water damage. If you do find water damage, evaluate the potential for mold growth.
Everyone knows mold is one of the leading causes of devalued property. Search for black or dark areas. It’s common for mold growth to be seen around the corners of the foundation.
Short sales and discounted properties are everywhere from Maine to California. However, it takes time and research to find ones that offer income potential. Even residential properties in the best neighborhoods are beginning to grow in value thanks to a growing economy.