Over the country we hear about the foreclosure infrastructure and increased number of them over the past 6 months. According to a number of sources, get ready for a massive introduction in to the 2009 year, in the spring.
According to Fannie Mae, we will be seeing numerous foreclosures in March - July which will do a number of things, good and bad. Depending upon which side of the scale you are on.
If you are looking to buy a foreclosure, lets make sure you know what you are doing and find out everythign about the house, as nightmares can be at hand, but a great deal comes along with risk. Risk reward and you might just jump into instant equity with a little fixing up here and there. Make sure of these certain conditions when looking. Roof, Windows, Heating source, all plumbing lines, basement foundation, and any major electrical that might come up. If you do your homework and estimate a cost basis per home, no problem on what you know you need to pay for the home. But don't think the estimated market value will immediately go up, but it will. If you find out what the house sold for previously and what the current market conditions are doing on a CMA from an agent, you will know what they are worth, as you want to look at the low CMA numbers not the median or average. If you can get it 20% less than the low, and that is with your estimated work into the property. Get ready to make bank. If you hold on to your investment, rent, flip, or whatever, do your numbers before you put an offer, even if it sounds like a great deal. Make the numbers work for you first.
If you are looking to sell, keep in mind, the repo's out there will lower home value's because they are also used as Comparable sales, which are lower usually than the current market conditions, bringing the sellability or high price of your home, down. Look for great deals to buy homes in 2009 and be cautious when selling because yours might just be lower than your expected due to this reason. If you can do a few things that create value, not curb appeal, or shiny new sinks, you can do alright. if you watch HG TV, remember, your market is different from there show if you don't live in the area they are airing. So what they do to improve and some shows make it easy to flip cuz these people do it on a daily basis. Increasing value to your home are some minor things, but don't put yourself upside down trying to do them either. Look at a return on your investment at even to even so if you put in 10K don't expect to get 15K more because it doesn't work that way anymore or right now currently in our market condition.
Keep your head above water, get a CMA on the one you want to buy or sell, and listen to the pro's as they are in the pits fighting for clients and make sure your agent is a good one!
Dave Werth 218-790-7653
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