Like Moths to a Flame, Buyers Can't Get Enough Foreclosures

I was meandering along the walkway in my front yard the other day and my eye happened to catch a really cool sight.  A furry bright red ant that had a black bad on its rear.  It wasn't a small insect.  It was about the length of half of my pinky.  Really neat looking.  Because I'm a fool for shows about nature, I know that anything bright red in color is usually sending a warning sign to stay away.  Whatever this ant was, it was probably not anything I should attempt to pick up, despite being tempted to do so.  

Being inquisitive, I looked up the ant online and found it.  It's a Red Velvet Ant, but actually a wasp.  It's sting is apparently very painful.  One article I read called the females (like the one I saw) cow killers.  

As a Bristow-Gainesville Real Estate Agent, I see that a lot of the cash poor buyers I come into contact with are drawn to things that they should similarly take warning from.  Low priced foreclosures.  Their low price is usually an indication of property condition that in a lot of cases, won't pass muster for a buyer who needs a loan.  And even if it squeaked by, there are issues in below market value foreclosures that most buyers aren't considering.  What's the condition of the HVAC system that hasn't been running for months or even years?  Is there mold in the house?  Water damage since the sump pump in the basement hasn't been powered?  Does it need new appliances...again since there's been no electricity.  The thought process is that they will get into the home and just take each project as it comes.  That can end up devastating a family financially, especially when banks have become so stingy with home equity lines...which is what a cash poor buyer would need to finance projects.

Foreclosures priced well below market value should instantly flash a warning sign in the eye of cash poor buyers.  If you don't have the cash for a down payment on a home like that low priced foreclosure that you can't get out of your mind, chances are you don't have the cash to rehab it.  If it were in good condition, the bank would definitely be asking full market value.

 

 

 

 

Chris Ann Cleland, Associate Broker- Licensed in Virginia, GRI, SFR, Northern Virginia Short Sale Specialist. Affiliated with Long & Foster, 7526 Limestone Drive, Gainesville, VA 20155.  To contact Chris Ann, call 703-402-0037 or email chrisann@LNF.com.  Or you can visit her website:  www.nvarealestate.net.

Header photos taken by Chris Ann Cleland.

The opinions expressed in this post are those of Chris Ann Cleland, not those of Long & Foster REALTORS®.

 
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9 Comments on Like Moths to a Flame, Buyers Can't Get Enough Foreclosures

AUG
06
731,245 Points 103 Featured Posts Outside Blog Called Shot Master

Hi Chris Ann - Some of those are bad enough that you simply can't get any kind of traditional financing at all. My buyers who just want to carpet, paint and maybe fix a few dings keep dragging me around to these - there sure there's a pony in there somewhere, as the story goes.

And I remember those ants from when I was a kid, and yes, those stings are very painful.
2:23pm • #1
1,521,703 Points 112 Featured Posts Localism Sponsor Outside Blog Called Shot Master

Dick:  I don't want to find out about how painful those stings are.  This is the first one I've ever seen.  It's really cool looking.  As for the foreclosures, I don't know why experience isn't teaching these bueyrs that there is no such thing as a bank slashing the price of a home for the heck of it.
2:42pm • #2
484,084 Points 59 Featured Posts Outside Blog Called Shot Master

Many foreclosures sure look like a good deal until you add up the cost to make them habitable.
4:00pm • #3
707,260 Points 56 Featured Posts Outside Blog Called Shot Master

Good Afternoon Chris Ann, I see a similr thng happening here in NH. Nearly every day actually, I warn them with similar messages and costs. The good thing is most ow cost REO homes are cash only which spares or saves them,  Have a Great day
5:19pm • #4
640,356 Points 53 Featured Posts Outside Blog Called Shot Master

Chris Ann.  Smart move to leave the insect be.  I have heard a lot of complaints lately about foreclosures drying up.  Isn't that a good thing?  Means the economy is finally springing back.
6:29pm • #5
AUG
07
986,706 Points 106 Featured Posts Localism Sponsor Outside Blog

People just can't wrap their heads around the fact that if it sounds too good to be true, it probably is. Instead they think this is their lucky day that they discovered such a great deal. Well, you know the saying, there's a sucker born every minute.
6:54am • #6
275,890 Points 17 Featured Posts Localism Sponsor Attended Rain Camp Called Shot Master

I have seen so many buyers who start out saying they want a steal of a foreclosure but quickly change their minds when they see what they are like in the real world.
8:11am • #7
1,521,703 Points 112 Featured Posts Localism Sponsor Outside Blog Called Shot Master

Cynthia:  It's not so easy to make them habitable either when you are cash poor.  

Scott:  The really rough ones are always cash only.  What bank would fund a loan on them?

Belinda:  I heard a national report that ws touting the opposite the other night, but I always take the national news with a grain of salt.  I know we don't see as many here in Northern Virginia as we had been seeing.
8:46am • #8
1,521,703 Points 112 Featured Posts Localism Sponsor Outside Blog Called Shot Master

Elizabeth:  It's a hard lesson for some to grasp.  I guess reality is just too harsh for those to deal with. They'd rather live in fantasy land.

Kathryn:  It's about 50/50 with the buyers I have helped.  Some give up on them quickly.  Others are convinced that is where they are going to find a steal.
8:47am • #9


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Chris Ann Cleland, Associate Broker, Northern VA

Bristow, VA

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Long & Foster REALTORS®, Gainesville, VA

Address: 7526 Limestone Drive, Gainesville, VA, 20155

Office Phone: (703) 402-0037

Cell Phone: (703) 402-0037

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