Foreclosures And Fixer Uppers

By Kaci Cooper, 23 Jan 19:02

Ads and commercials make it sound easy to buy foreclosures and fixer-uppers.

All you have to do is watch the right infomercial and with a low cost plus shipping and handling you will know everything there is to know about buying foreclosed property. Take a breath before deciding on these options. It is true that sometimes you can save money when buying a foreclosed home, but handing over your credit card is not the right way to do it. With reward comes risk, you need to (through understanding the process) decide whether the risk is worth it.

Facts on Foreclosures

Foreclosures are when the lender or the banks repossesses a property because the original buyer failed to make payments. Often banks and lenders are willing to unload the property on other buyers because they do not deal with property management.

Do the following before even considering to buy a foreclosed home:
-Visit www.hud.gov, this is the website for the U.S. Department of Housing and Urban Development. This site gives information and property listings.
-Search local listings on the internet or in respected magazines.
-Do not go to auctions, instead work directly with the lender in charge of the mortgage on the home.
-Tour property and insist on having it inspected. When buying, you are in charge.
-Compare the foreclosed home to other property values.
-Buying a foreclosed home comes with added paperwork, so be ready.
-Unless your very experienced, find a real estate agent who has experience with foreclosed homes to help you.
-Finally, be wary of ads, which often lead to disappointment.

Fixer-Uppers: Sweat Equity

A little sweat equity can do wonders for your home appreciation. So if you have the time and are handy around the house, then perhaps a fixer-upper might be a good option for you.

There is no perfect formula for determining whether fixer-uppers are worth the risk, but you should consider the following:
-Cosmetic versus Structural: Cosmetic repairs cost less and are simpler to complete, and also appeal to the eye.
-Make sure the repairs are worth it. If the repairs will cost more than the resale price, then perhaps it is not a home worth fixing.
-Are you going to do the work or are you going to pay someone to do it? Either way you have to consider the time, money, and stress that fixer-uppers cost.
-Is it easier to pay more money for a finished home or deal with the dust, debris, and chaos that comes with fixing up a home? This is the most important question because repairs always take longer, cost more, and are more stressful than was expected. But it depends on whether the stress outweighs the feeling of a job well done.

Principle of Progression

Try to buy a home that needs a lot of work in a good neighborhood. This is where people want to be to raise kids and feel safe. They also want to feel that their house is better than their neighbors’.

Tags: fixer foreclosure