|
|
|
Tread Carefully When Considering a Foreclosed Home |
There are certain times in all of our
lives in which the timing is just
fundamentally unfair. Unemployment leaves
us with lots of time, but no money to go on
vacations. You finally find those long lost
favorite jeans, only they don't fit anymore.
When real estate prices are dropping, we
can't all snap up houses cheap because we
don't know the state of our own budgets.
You've seen me write in this newsletter
about how easy it is to get caught up in
emotions and react to media hype-
especially when it comes to money. This is
happening more and more with the low real
estate prices and high number of foreclosed
properties. People who have never
considered investing in real estate are
suddenly expressing interest in flipping"
homes - buying them low, fixing them up
and selling them for a profit.
If you're in a great financial position and
want to buy a home, consider yourself very
fortunate. However, if you are thinking the
low real estate prices are a good reason to
start dabbling or investing in the market,
tread carefully.
Before you go ahead and make any moves,
think about the risks of buying a foreclosed
home:
- The house may not be in good
condition.
Sure the
notion of someone defaulting on a
beautiful home that has been outfitted with
fancy appliances that you pick up for a song
is a good one. However, it's likely that before
a person foreclosed on a loan, he or she
had money problems for a while, so home
repairs were probably not a priority. Many
people spend a lot of money fixing up
foreclosed homes that have
fallen into severe disrepair, and any savings
you gain from buying a foreclosed home
could be lost in the cost of home repair.
- Lots of competition.
If
you've ever
thought of getting a great deal
on the biggest investment of your life,
chances are that you're not alone. There are
investors, real estate professionals, and
contractors who buy and sell foreclosed
homes frequently. You will be competing
with them for these
houses.
- What
you see (or
never see) is what you
get.
Once you get the home, there
is no
room for negotiation in terms of repairs. If
you thought
the house had sewer, but it actually has
septic, too bad. Many of these houses need
to be bought sight unseen. There are stories
of houses with pets left in them, concrete in
the drains, and other horrific discoveries
from people buying foreclosed home. So the
money you save on buying a foreclosed
home is often put right back into
repair.
- There
may be an emotional price.
One
woman in
the Boston area bought a foreclosed home
and saw
the family moving out. She was so affected
by their
unhappiness that she always felt the home
had a bad feeling and was never really
comfortable
there.
- Do you want to be a
landlord?
You may end up needing to rent out the
house.
Think about the hassle factor: you'll get calls
in the
middle of the night, need to chase down
rent, etc. If
not, are you ready to pay to hire a
management
company?
Just like mom always told you, there is no
such thing as a free lunch. This old
expression holds true when it comes to
buying foreclosed homes. Look before you
leap!
|
See Debbie on NECN |
Debbie Siegel recently was interviewed by
New England Cable News about the
unexpected increase in home sales in
December. Is it a sign that the worst is
over? Not so fast. Here
is an excerpt from the video:
[Debbie] Siegel doesn't think that
momentum can be sustained. "The rising
jobless rate will trump any impact of lower
prices."
See what
else Debbie
had to say!
|
February's Home Value Improver |
When You Can't Sell Your
Home
Unless you have been living on a desert
island for the past few years, you know it's
not a good time to sell a house because of
the economy. If that upsets you, there is a
lot you can do that will enhance your quality
of living while also improving the value of
your home - even if a sale is not in your
near future. Many of us are leery to undergo
major projects in this economy, though.
Perhaps you'd like to see what just a few
thousand dollars will get you.
Look down.
One way to feel better about your living
situation is to change some flooring. Is that
old tile in your kitchen that was poorly
installed by the previous homeowners
getting you down? Look at your options for
flooring. Some of the laminate out there right
now is really nice, and the faux tile is quite
convincing! Installing wall-to-wall carpeting
in a 12x12 room can cost as little as
$400.
Tear down a wall.
One of my clients completely transformed
her 100-year-old Arts & Crafts Colonial by
opening up a doorway between her kitchen
and living room. They did it for less than
$2,000, and ended up not only improving the
value of their home (open floor plans are
very popular), but decided that they liked
their home after all and did not want to buy
another one.
Upgrade your kitchen counters.
Replacing a tired counter top with some
gleaming granite can make an old kitchen
seem shiny new again. Some of your many
surface options include granite, cement,
which now comes in many, many colors,
engineered granite such as Silestone, and
marble. This will probably run you more
than just a few thousand, but it's an
investment you will get back when you sell,
and it will make your kitchen look
better.
Clean the yard.
You can have a wonderful feeling of pride
when you pull up in front of your clean and
well-kept yard. Now that we are close
enough to feel the spring thaw, focus on
improving that oft-discussed curb appeal.
Declutter.
You've probably read lots of new-agey
magazines that talk about the psychological
benefits of decluttering, and I'm not sure
about those. But I can certainly vouch for
the aesthetic value you gain from the
exercise. You'll be doing one of the top three
things real estate agents advice clients to do
before they put a house on the market, while
making your life more organized and simple.
And, it will only cost you a few trips to the
local home organization store.
|
|
|
|
So President Obama has signed the
stimulus package. We won't know for a
while if it truly helps the country climb out of
the worst recession it's seen in years. For
many homeowners, the question is whether
the package will help them keep their
homes, catch up on payments and feel
more secure financially. Again, we just don't
know.
Is it a good idea to print money and hand it
over to the very insitutions that helped drive
the economy into this mess? I'm not sure.
We're in a time when most of us have more
questions than answers, when we really
have to wait and see.
While you're waiting, please feel free to call
or
email anytime for information on any
mortgage topic!
Best regards,
Debbie Siegel
President
Westchester Mortgage
P.S. You're receiving this E-Newsletter because you have a prior relationship with me or with Westchester Mortgage. If I've sent this to you in error, or if you want to remove yourself from the list at any time, just click the "SafeUnsubscribe" link at the bottom of this e-mail.
|
|
|
|
|
|
Click here for some tips on
how to choose a mortgage broker!
|
|
|