Tag Archives: condition

Foreclosures: The Good, the Bad and the Ugly

There are many distressed properties available in our market, also known as foreclosures.  They are easy to find and generally easy to buy, with some exception.  But if your goal is to realize a financial return on investment, your purchase strategy must be lead by the facts, and not the emotions, of the transaction.

There are basically two types of distressed properties: those distressed by the financial condition of the owner and those in distressed condition.  Of those two types, subcategories exist that need to be understood for your maximum benefit and protection.

The two types of distressed properties are those that are:

  1. The result of the homeowner’s financial position or condition or 
  2. The result of the property’s inability to overcome a significant structural or other depreciating issue(s)

The better of these two scenarios for the future buyer is item one.  A home owner’s financial position or condition may lead to a foreclosure due to his inability to continue meeting his monthly housing costs, including mortgage and other escrowed amounts such as HOA dues, etc. 

In this case, if the homeowner is unable to rent or sell the property at a profit or to break even, he has few options.  He may sign the house back over to the lending bank or agency.  This process is called a deed in lieu of foreclosure.  Another dilemma may be getting behind in the mortgage payments and to become foreclosed upon.  Both of these cases have a significant negative impact against the credit score that lingers for several years. 

Foreclosures may be listed in the local Multiple Listing Service, be available as a Sheriff’s Sale to be sold at the courthouse steps, and/or be listed on the presiding attorney’s website for sale at the courthouse steps, or may be available at an onsite or offsite auction. 

There are also a myriad other websites that market foreclosures to capture buyer clients’ information.  If the lender is known, the pre-foreclosure department may accept an offer before the property hits any of these venues.  I have represented clients in purchasing foreclosures in all the above scenarios.  

A form of pre-foreclosure is increasing in prevalence and is called the short sale.  This typically takes place prior to foreclosure, but it’s headed in that direction.  A short sale occurs when the homeowner owes more on the property than its market value and fails to maintain his mortgage obligation.  Currently about 50% of these transactions close.  Those that don’t successfully close become foreclosures.  Last year’s first quarter there were 25 short sales being negotiated in our market.  This year, first quarter, there are 700. (Wells Fargo Loss Mitigation Supervisor Gwen Oberg, Secondary Market Loans, Charlotte Market).

Though the short sale or foreclosure sale may be an arduous process, if the property meets all your requirements, it may be worth the extra effort and patience it needs to get a great deal.

BUT BUYER BEWARE

Distressed property type two is not always obvious.  While the home or property owner may or may not have a financial condition that leads to a short sale or subsequent foreclosure, the property itself may have prohibited a timely and profitable sale.  It’s easy to see that a 3 bed, one bath home is functionally obsolete in our market, but with the right changes that house could become one of the best in the neighborhood. 

What might not be apparent is the fact that from the front yard of a WOW house a major highway is visible or audible and on the other side of the street commercial development and traffic will greatly affect potential for appreciation.  Your trained and experienced REALTOR® knows what to look for in evaluating a property’s potential for appreciation or depreciation to help protect your best interests. 

Don’t be misled by well-meaning friends, neighbors, and co-workers who tell you all about the new homes they are purchasing for pennies on the dollar in the best neighborhood in town and lose faith and trust in your REALTOR®.  If you begin to feel jealous and angry that those folks a getting what should have been yours, you may make an ill-advised or hasty buying decision that you’ll later regret.

chrystal.safari@gmail.com

 

 

Ways to Make Your Home Sell Faster and For More Money

In addition to right pricing, condition, condition, condition is the watch-word for selling a home faster and for more money.  Simple fixes and staging practices can focus buyers’ attention in the right places and keep them from getting sidetracked by personal items in the home.

  

 

Remember, you are preparing your home to become a product for market; one that appeals to the broadest market.  Don’t feel offended that your REALTOR® insists your coveted widget collection is stored, away from view.  How your live in your home and how you prepare and keep it market-ready are very different.  The 10 minute rule applies: if you (or the kids) can’t put it away in ten minutes, reevaluate whether you must take it out.

   

 

The front yard and door are the buyer’s first impression of your product.  If buyers won’t leave the car, you can’t make the sale.  Clean the gutters, paint the front door, pull weeds and spent flowers, polish the hardware, and power-wash walkways and siding.

 

Be prepared for a white glove inspection. Prospective buyers pull open drawers, look in closets and peek behind the shower curtain, and inspect the oven. Mop, dust, vacuum, clean baseboards, wash windows. Make sure the house looks fresh and smells neutral.

 

Remove furniture that makes rooms feel crowded or décor that will distract buyers from your home’s architectural features.  

 

 

Use furnishings to give each space a logical identity.  If it worked best for your family to use your formal dining room as a home office, get rid of the desk and computer, and bring back the dining table and chairs.

 

 

Eliminate countertop clutter. A countertop covered with small appliances and utensils looks crowded, not spacious. Store personal items, including toiletries; stash family photos and team and religious memorabilia.  Make the place look suitcase ready.

 

 

Dripping faucets, burned-out light bulbs, and squeaking hinges become a distraction and can falsely magnify a home’s need for routine care and maintenance and tend to make the buyer question the condition of other items that can’t be seen, such as the HVAC, roof, and other expensive items.

  

  

The buyer is mentally subtracting thousands of dollars from your list price with every flaw he sees.

 

 

Finally, ask yourself, “Is this property’s condition what I would like to see when I go house hunting this afternoon?”

 

For a checklist on how to prepare your home for market, or a list of preferred and proven vendors, email your request to: chrystal.safari@gmail.com

 

 

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