Is a Foreclosure a Bargain or a Nightmare Waiting?

It’s an unfortunate result of the recession — many families haven’t been able to keep up with their mortgage payments and have lost their homes to foreclosure. And foreclosed homes often sell for less-than-market rates, making them seem like a bargain to buyers who are used to the inflated prices of a few years ago. But comparing a new home to a foreclosure on price alone is a mistake. You can’t put a dollar value on your peace of mind, safety, financial reserves and time — all of which could be in jeopardy if you buy a foreclosed home.

For example, a foreclosure could have legal issues. Before buying a foreclosed home you will have to do thorough research — or hire a title company or lawyer — to make sure there aren’t any additional financial or legal liabilities attached to the home. There may be liens on the property for unpaid taxes, home owners’ association dues, or the home may have been put up as collateral on other loans that weren’t paid. You could become liable for thousands of dollars of debt you weren’t aware were attached to the foreclosed home.

As soon as you take ownership of a foreclosed home, anything that breaks or any problems that arise are your responsibility. This could cost you lots of time and money that you may not have budgeted for.

With a new home, maintenance won’t be an issue for a while with the brand-new appliances and systems. And if something does go wrong in the first year, there is often a new home warranty that guarantees repair or replacement.

Foreclosed homes also often haven’t been taken care of by former owners who knew they were going to lose the home. In some cases vandals, thieves or even the owners have damaged the home, removed appliances or torn apart walls to remove copper pipes that are valuable as scrap metal.

A foreclosed home could have been sitting vacant for months or years, and if it wasn’t properly secured, there could be significant damage from water, mold, weather or pest infestations. It could cost you thousands of dollars and a lot of time to bring a home that was allowed to deteriorate back to a livable condition.

You also don’t have to spend time or money changing someone else’s design preferences with a new home. No tearing down wood paneling, repainting walls, or replacing outdated flooring. Your preferences are included as the home is built, and they are there waiting for you the day you unpack your boxes.

With a foreclosure, you don’t know how many renovations or repairs have been made over the years, or who made them. There could be faulty wiring, weakened structures or other conditions that could be dangerous and costly to bring up to safe and modern standards. To protect yourself, make sure you have the home thoroughly inspected during the allotted inspection period that is given to you by the foreclosure company that owns the home.

Source:NAHB

The Key to Finding Your Dream Home

You're ready to buy a home, but not just any home. This home needs to fit your unique style and needs. But you also have to be realistic, it has to fit your budget. You probably won't win the lottery next week so let's start with a point by point plan to find your special home.

These list below will help you prioritize the features, elements, and amenities you’re looking for in your new home. Some are non-negotiable must haves, others are more on a wish list if price allows, and lastly you'll see some that you may not have considered but not realize their importance.

 Price -- Knowing ahead of time how much you can afford and what you are able to spend immediately enables us to narrow down the vast market of homes to about 10 percent of what’s currently on the market.

Property Type -- Are you looking for a house, town home, condo, co-op, or multi-unit home?

Condition of property -- New or old? How much sweat equity do you want to put into the property? Do you want to pay a little less and invest time and money to improve the house yourself, or do you want to buy a house that’s ready to move into?

Must-haves -- What do you absolutely need? An office? A room for the new baby?

Wish list -- Separate from the must have. You may only need a 3 bedroom home but a 4th would be nice Or perhaps you'd like a pool or space to park your boat. These extra features cost more money. Can you go up in your sales price? Or maybe you can get yourself established in this house and then later move-up the home that has all your extras when your income allows it to be a reality.

Separating Your Wishes from Your Needs -- This is a key element to house shopping. It will help you sort through all the properties on the market quickly and easily, focus on those that are in your price range and worth your time and energy to view and inspect. As you start viewing homes, you will begin to separate your needs from your wishes and decide where you can compromise to meet your budget goals.

Location -- Where do you want to live? If you’re like most home buyers, you have a basic idea of where you want to live. Proximity to family, friends and/or work plays a significant part in where you ultimately want to put down roots. However, there is a lot of leeway within these parameters – neighborhoods and communities within the same distance often vary quite a lot.


If you are ready to start the process, give me a call. I'd love to work together with you to find the right home that you'll love coming home to each night!