Right now there is a shortage of foreclosed homes in the Metro Detroit area of Oakland County where I sell real estate. Is this good news or bad news? As with anything, it all depends on perspective. While I don’t want anyone put out of their home, we hear from all sides that there are a lot of vacant foreclosed homes just waiting for the banks to release.
I work with an investor who is buying roughly in the Ferndale, Royal Oak, Oak Park and Berkley areas. He is ready to buy, fix them up and sell. This is a prime time with almost four months left for the first time buyer credit, which will cut down on the inventory particularly during winter months. We have three foreclosure teams in our office whose inventory is way down saying they expect to get a lot of homes - now that the holidays are over.
So how do we choose which ones to buy? A prime example is a HUD home that my investor purchased in October. Nice sized home (1200) sq. ft. but no basement and no garage. I prepared comparatives to see how much it will sell for if he added a garage and then prepared a reasonable offer taking into account the improvements (garage, landscaping and interior repairs). This home is in Oak Park but a half block from Ferndale with Ferndale schools. The neighborhood is like living in Ferndale but listed as Oak Park in the multiple listing service (MLS). Oak Park is not considered as “trendy” as Ferndale with its walkable downtown, restaurants and entertainment.
Essentially we have a brand new home with granite counters, open floor plan, new carpet, large utility room, large lot and priced well at $69,900. While it has only been on the market for a month (and during the holidays), my investor and I thought it would be gone quickly (or at least more showings) because of all these factors-including 10% first time buyer credit. This essentially brings us back to the question – which homes to purchase. This is a crucial time since many first time home buyers use FHA financing and investors cannot sell FHA for 90 days after closing. If investors close now, they can’t sell FHA until the middle of April. This is a small window for first time buyers – if, in fact, there is a lot of inventory to hit the market.
See what you think of this home and why it hasn’t been grabbed up at that price?
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Birmingham Realtor selling Oakland County Real Estate. TishHouse sells Houses – selling Real Estate Southeastern Michigan with RE/MAX Showcase Homes in Birmingham, Michigan. Helping People in a challenging market by specializing in Short Sales. See what my clients have to say about my extraordinary customer service. Follow me on Twitter..
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