I recently wrote an article about finding equity in foreclosures. As I was reading through all of the comments I came across this from Sybil Campbell, a Realtor® from Williamsburg, Virginia. She said "John, I have looked at and have shown several foreclosures but never found one that I felt was worth the risk". I knew exactly what she meant. How many times, I thought, have I walked across a floor that felt like it was more suited to be a in skateboard park. How many times have I wondered if the heat would work, or if it was even there. How many times, as I was getting in my car after a showing, have I felt an overwhelming urge to head straight home for a shower. How many times have I thought "did I really just show that to a client?"
Thinking back to the foreclosure I discussed in my previous article. I had no reason to believe the house I was going to show was any different from all of the previous foreclosures I had shown. Sure, the pictures looked good. Still, it is always a little scary anytime you turn the knob on a foreclosure. Now, imagine my surprise when... what is that smell? OMG. That's the smell of paint and new carpet! Are we at the right address?
We were at the right address and the surprises just kept coming. The walls were without holes and freshly painted. There was new carpet and wood floors throughout. New appliances. New HVAC. New windows. What is going on here I wondered. Did Fannie Mae really renovate this property? The answer is yes, and as you already know, all ended well for my client.
I was happy with the way things turned out and I didn't give it much more thought until two weeks ago. I was showing clients another one of Fannie Mae's Ocean City foreclosures. As I opened the door I realized that this property had also been renovated.
I can think of a number of reasons why renovating foreclosures would benefit Fannie Mae and their mission to provide affordable housing to first time home buyers. The renovation certainly makes the home more appealing to buyers with limited resources. It is move in ready, the repairs are included in financing, and the buyer can feel confident they won't have to make expensive repairs for some time. The renovations also make the home less appealing to buyers who are only looking to flip the property. Again, good for the first time home buyers who would otherwise have to compete with the flippers. Of course, this is all speculation on my part.
So what is Fannie Mae up to? Are you seeing this in your area or is this only happening in my neck of the woods? What do you think?