If you've been reading this series, you already know how our househunting began and our quest for the perfect realtor. This time I want to discuss a bit of what we learned about foreclosures and short sales during our home search.
In looking online for possible homes we would be interested in, I kept seeing these fabulous-looking homes at low prices. We all know the market is slow and prices are low, but these places seemed even beyond that kind of low. A house built in 2003, with a pool and a two-car garage on a quarter of an acre with 2,000 square feet for $108,000? There must be a catch. Well, there was. We found this time and time again,
Most of the houses I was finding at these low prices with all these goodies were either short sales or foreclosures. Since the prices were so appealing, we asked the realtors we talked to if a short sale or a foreclosure might be something we should be interested in pursuing.
They were all in agreement that short sales were OK for someone who was willing and able to take a long time to consummate a deal and was also willing to take the chance that a deal might fall through, even after money had been spent by the prospective buyer for inspections or surveys. Sorry, but this was not for us. We like nearly instant gratification and prefer not to spend money and come up empty-handed!
They were also in agreement that a foreclosure, also sometimes called "bank owned", was a totally different animal, and more or less just like buying from another homeowner except that in a foreclosure the bank is the owner selling the home. So, I began to look more closely at the foreclosures that came up in my online searching, and I found several that we decided to look at.
As in the online pictures, they looked quite nice from a distance, but the ones we viewed close-up needed a lot of work to be livable. Stained carpeting and holes in the walls were quite common. Most appliances were either non-existent or in need of lots of repair and cleaning or total replacement. One driveway we pulled into had water running down the length of it, and upon examination of the garage, we found that the water heater was leaking across and under the garage door. Not a hopeful sign!
On the other hand, if you love nature, you might enjoy watching the tadpoles leaping about in the green water of the pool. For some buyers, a bare concrete bathroom floor might have a sort of nostalgic locker-room appeal to it.
Seriously, if you love renovation, a foreclosure could be a great way to get a beautiful home for a lot less than you would have spent a few years ago. Keep in mind, however, that although you might have a low purchase price, you may have to spend a tidy sum to bring the home back to livable standards.
Carpeting, new appliances, painting, fixing holes in the walls as well as electrical and plumbing problems, cleaning up and possibly even replanting the landscaping, and trimming trees and bushes that have been allowed to turn into a jungle, can all be expensive and time-consuming. Plus, we haven't even started to talk about getting the pool into shape, easily another few thousand dollars out-of-pocket.
We decided to continue to look at foreclosures, but we were sure to keep in mind the money pit they might become - or the beautiful home lovingly renovated and resuscitated by our own hands.
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