Foreclosure Listings are Bargains Worth Investigating

It is entirely possible to think of a residence that’s been the subject of a foreclosure as the real estate equivalent of a cute, cuddly orphaned kitten or puppy—one that deserves to be adopted by a loving family. You can think of the bank as the temporary animal shelter. With a little tender care, the adopted foreclosure can resume its place in the neighborhood, and all is well…

Or, a foreclosure can be the real estate equivalent of a snarling mutt that turns out to be a menace to anyone who comes near it…with the possible exception of a wild animal trainer (the real estate equivalent would be a remodeling contractor—one with lots of time on his hands).

For anyone who might consider checking out the local foreclosure listings in 2016, the paramount skill will be the ability to make sure any property they pursue is one of that first kind of ‘orphans.’ That’s because of the fact that the kind of quality protections that are taken for granted in a regular residential real estate transaction are not in force.

Since banks are under no obligation to disclose information about a foreclosure’s flaws, it is always a true ‘buyer beware’ situation. No matter what the time pressure might be, it’s imperative to make a physical investigation of any foreclosure offering as early as possible. The more thorough the inspection, the more confidence you will have that any budget forecast accounts for all the expenditures you are likely to encounter in the course of turning a foreclosed property into a move-in ready residence.

The good news is that despite the reality that the local real estate market has tightened up a good deal since the days of the real estate meltdown, foreclosure properties are still coming onto the market. Since would-be bargain hunters are no longer intimidated by the fear of falling housing values, timing becomes important. With sharp-eyed competitors regularly on the lookout for promising foreclosure listings, it’s important to be alerted to new opportunities as soon as possible. In this regard, there is also another ‘buyer beware’ situation—this one having to do with some of the online dedicated “foreclosure” websites. Avoid any that wind up providing outdated and/or endlessly repeated ‘bargains’—for fees billed in advance. If you decide to try them out, see if they offer a free trial. You will quickly find out if you are being directed toward wild goose chases instead of what’s been advertised.

A better way to start is to give me a call as I have sold hundreds of foreclosure properties to  bargain-minded buyers. If you wish, I will be happy to include local foreclosure listings along with other new entries as they come onto the market—as well as to offer the kind of prudent advice and guidance that helps turn ‘orphans’ into family-friendly residences. A foreclosure may not be for everybody—but the rewards for those who are able to take advantage of them can be substantial!

Talk of Local “Property Values” Requires Further Explanation

Every local homeowner knows that the state of local property values is important. But regardless of how important property values are, it’s also true that the term itself is hard to pin down. It’s more elusive than most of us assume—it literally means different things to different people.

One of the odd things about the English language (or any language, I imagine) is how it can convey an impression of being more specific than is actually the case. For example, if you say, “This year there’s been more rain than usual” everyone thinks they know what you mean—which is probably not that since January 1, 2015 until today rainfall has totaled more than the annual average. What you mean is that since the end of summer (or perhaps since October) it’s been rainy. The difference in that example isn’t all that important. But when it comes to local “property values,” delving into what is meant is more worthwhile.

The term means subtly different things to different people (or even to the same person, depending on their intentions). To most homeowners, for instance, if you say that local property values have been on the rise, their first interpretation is likely to be that their home can now be sold for more than before—in other words, they equate ‘property values’ with ‘market values.’ They don’t mean that it has now become a better place for their family to live in: that would be its ‘use value’ or ‘utility value’—a different thing altogether.

On the other hand, to a lender, a home’s ‘property value’ usually means its current market value. To an investor, ‘property value’ could well mean its ‘future value’ or its ‘liquidation value’…which could be different numbers depending on whether the speaker is imagining a forced liquidation or an orderly liquidation. The upshot is that “property values” is one of those precise-sounding terms that’s a lot more slippery than it seems.

Especially when it comes to major transactions like the purchase and sale of local real estate, it’s a good idea to be as precise as possible. In that regard, more useful are terms like “asking price” or “selling price.” They describe actual numerical values in a particular currency at a specific time. Although it’s certainly not bad news if we hear that local property values are likely to keep rising in the new year, that needs a lot more detail to be very meaningful (give me some neighborhood comps, thank you very much). And since we’re on the subject: anytime you are ready to investigate the current state of our local real estate market, I hope you’ll decide to give me a call!