The increase in foreclosures throughout IL is tragic!
Statewide, foreclosed properties have increased 42% since May, 2007. The terrible misfortune that foreclosed homeowners feel often becomes big opportunity for those looking to buy these distressed properties at a significant discount off market price
Foreclosed homes totaled 9,670 across IL in May, 2008, according to RealtyTrac. This is up 15% from April. Nearly 3,000 of these properties have reverted to ownership by the bank.
Keep in mind, however, that those priced lowest are usually priced that low for a reason - they need considerable work, often at great expense, to make them livable again.
Vacant properties owned by the bank (called REO's, for Real Estate Owned) often have broken windows, frozen pipes, mold, and considerable water damage. Some have housed squatters - and these homes can smell pretty bad if they don't contain working bathroom facilities.
Generally, the homes in the worst condition attract professional contractors experienced at heavy renovation. Often, electrical wiring needs to be replaced, as does plumbing, windows, and the roof. For most who plan to clean up and occupy the foreclosed home, those requiring less extensive work is usually the better option.
As a rule of thumb, the more attractive the property's location and condition, the less likely the bank will offer price and repair concessions. Those in challenged locations, and in rough condition, usually allow for greater discounts from the bank owner, especially if the bank has held the property for an extended period of time.
How to locate foreclosed properties in your area? Many different websites exist, and they often charge a moderate fee to subscribe. ChicagoForeclosureReport.com is one website Dean's Team Chicago uses to identify and research distressed properties the day after the foreclosure action is first filed with the County Clerk of Court. Often times, contacting the seller BEFORE the bank takes back title to the property will allow for easy price negotiation, directly with the seller - although, to be sure, the process involves some patience, and persistence.
Our Team often searches MLS-Listed distressed properties by searching keywords in the Listing Remarks copy. Terms such as "Corporate Owned," "As-Is," "Bank Approval Required," or "Short Sale," indicate pending or completed foreclosure.
Usually, good credit, or cash, is required to purchase a distressed, foreclosed property. However, the FHA offers a special loan program, through selected lenders - its 203k program - to provide financing for purchase, repair and rehab of the property. Click the FHA website here for more info on their 203k program.
See our post today at BlogChicagoHomes.com for more info, as well as the link to Mary Ellen Podmolik's story in last Friday's Chicago Tribune.
DEAN & DEAN'S TEAM CHICAGO
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