Continuing from my last blog, foreclosures can represent a good value. Before you can assess if a property is a good value two things must be done. An Inspection and a market analysis.

Generally a buyer is not allowed a full blown inspection until the home is under contract. It is my opinion you need to look at these homes with an experienced agent like the Brian Maecker Team. When looking at these homes, look at the yard, the roof and the paint on the exterior. Try to determine how much money it will take to bring it to average to good condition. A simple paint job averages $2000. Go inside and look at carpet, paint, baths and kitchen. Most of the foreclosed homes need something. An experienced agent can help determine the home needs and the price tag that goes with it. Add up the dollars and save the total.

Next have your REMAX agent do a market analysis. Look at area solds and actives. Analyze their condition versus the subject. If the subject is priced below the solds and the dollars to improve it are still below the solds, it’s a good value.

Unfortunately, I am not seeing good values in the foreclosure market. Recently we had clients that bid $43,000 for a condo. It needed mold remediation, carpet, paint and totally new bath. We estimated the repairs at $12,000. The values in the area were $55,000-$60,000. Another person bid $57,000 for this home. I believe the buyer and their agent did not look at a market analysis or the repairs correctly. “Bad Investment for that Person.”

Don’t let that happen to you. Let the Brian Maecker Team with over 30 years of experience help you make a good investment. Visit us at www.maecker.com.  

Thanks,
Brian

What is a foreclosure home? What is a Bank Repo? What is a short sale or compromise home? Please let me explain. Many of you are wanting to buy a foreclosure home because there is a “Perceived” value. Sometimes they are a great deal. More often than not they are just a beat up home.

A foreclosure home is a home that a bank or the government owns. Typically banks such as Countrywide, Wells Fargo, Citimortgage, Wachovia and the like have taken over the ownership of these homes. Bank repo and foreclosure homes are the same. A government foreclosure is known as a FHA/HUD or VA repo. These were government sponsored homes that people got foreclosed on. All of these agencies have companies such as REMAX, Westfall & Assoc. and Muldoon & Assoc. to sell homes in Colorado Springs. They are listed thru the Pikes Peak MLS system. There are various websites that also show these homes. To owner occupants the process is the same as buying a regular home. For investors, you must bid at the end of a 10-day period.

A short sale or compromise sale is a home that’s being sold that is late on payments. The banks do not own the property. The homeowner is behind on payments and is “hoping” the bank will allow the home to be sold for less than is owed. Buying these homes is very hard and time consuming. It can take 6-8 weeks to get answers from the bank. Usually these homes are in better condition than a foreclosed home, but the wait is a killer and usually disappointing.

Stay turned for next week and we will talk about value and condition. If you would like more urgent information, contact me at theteam@maecker.com or my website www.maecker.com.  

Thanks,
Brian