So You're Looking for a Bargain

     Today's real estate market has wonderful possibilities to save money compared to several years ago. Foreclosures and corporate owners, as well as short sales, are a major part of the bargain hunters landscape. They do require careful "eyes wide open" shopping. No house, no matter how marked down it is, is a good value if you would not have considered it a good place to live before the price reduction.

     Location remains the most important single factor in a house's desirability. Commute to work, schools, parks, shopping, and leisure amenities are all tied strongly to location. A house in an area distant from those factors important to you is not a bargain, merely inexpensive.  Builder foreclosures and steep discounts on new subdivisions in the Atlanta area disproportionately affected exurbia, where commutes are long and community amenities scattered.

   The number of foreclosures and rentals in the immediate neighborhood is very important. If many houses are in that situation, there is a strong negative effect on property values if houses and grounds are not kept up by the offsite owners. Knowledge of what has been happening in that neighborhood over the last 12 months is key, and most easily obtained by a motivated Buyer's Agent who concentrates on the geographic area that interests you. Even if you are an investor with money that you can risk, you will do better where there is less uncertainty in the immediate surroundings. 

    The ideal foreclosure is one of only a few in a geographic area of several miles. It is compatible with its neighbors in size and quality of construction, or slightly smaller. Whatever brought on the foreclosure has been sudden enough that routine maintenance hasn't been neglected. Someone has been taking care of the grounds, and has secured the house against vandalism or theft of appliances and plumbing. It is close to great schools, work, and amenities of daily life. It is clean, without evidence of vermin or the leavings of pets. Former occupants'  household goods are no longer there.

      Home inspection by the buyer is critical when making an offer on any foreclosed house, as the current off-site owner is likely to refuse to do any repairs. The potential buyer should count on that expense. The buyer needs to know ahead of time what it will cost to bring a house to livability. In the past, this has created some problems for new buyers seeking new mortgages on a house that may have been trashed. At this time, Wells Fargo has developed a rather innovative program to include repair costs in the mortgage, provided that they have supervisory control over the repairs' completion, basically by contracting it out to Home Depot and re-inspecting the work when it is done. The mortgage rate is a little higher, but might be worthwhile for buyers who don't have a large amount of cash for repairs.

       So, be cautious, get lots of information before you consider a foreclosed house, but enjoy perusing the current listings. There are likely to be more added over the coming year...