Photo by Alexander Stein via Pixabay

If a home is in foreclosure, you can buy it for less. Great deal, right? It can be, but there are pitfalls, and you need even more caution than in a regular real estate transaction.

Stages of Foreclosure

Foreclosure can take months or even years depending on the regulations of the specific state, but the stages are the same:

  1. Pre-foreclosure. The owner has been given notice of pending foreclosure but for now still owns the home. In this case you negotiate with the owner.

  2. Bank-owner. The former owner has been evicted. If the bank doesn’t find a buyer the house will be put up for auction.

  3. Real-estate Owned (REO). The home did not sell at auction. A misleading name because the bank still owns it. And needs to get rid of it.

How do I find a Foreclosure?

If you haven’t bought one before, your best bet is to work with a real estate agent who specializes in foreclosures. Some may have credentials: the Certified Distressed Property Expert (CDPE) or the Short Sales and Foreclosure Resource (SFR) designation. Foreclosures are listed on the same platforms as other homes, plus they may be found through banks, local city halls and courts.

Do I need cash?

Not necessarily. But if you’ll use a mortgage, get it pre-approved. You’re likely to be competing with cash buyers.

What should I watch out for?

Many foreclosed properties are in poor shape. If they haven’t been inhabited, and maintenance has been neglected and air conditioning hasn’t been running, there could be mold, debris and internal damage. Distraught homeowners sometimes make off with appliances and the copper. There may be liens in addition to the defaulted mortgage. Get an inspection, have the title checked out and assume there’s going to be work to make it livable.

How much should I pay?

Your agent can run a comparative market analysis (CMA). You should pay significantly less than for an unencumbered property to make up for the risk. Professional foreclosure buyers sometimes use a formula of 80 percent of a comparable standard property less cost of known repairs. For example, a $300,000 house that needs $50,000 in repairs should be (80% * $300,000) – $50,000 or $190,000. A skilled agent can help you be competitive without putting yourself in a bind.

Is a foreclosed property right for me?

It will take more time and effort than a regular purchase but can save a pile of money. A DIYer or a person comfortable managing major rehab projects has a head start. If you have strong nerves, high risk tolerance and the ability to be flexible, a foreclosure might be the best deal you can make.

Photo by Schluesseldienst via Pixabay

Selling? Ready to wow potential buyers with some high-impact touch-ups? Here are some top ideas to mesmerize home buyers—without spending a fortune on renovations. 

Dazzle Them at the Doorstep

Many of today’s home sales, and certainly most fast transactions, begin with online browsing. First, snap a photo of your home. Take it from the perspective of someone walking up to the front door. Is the walkway weeded? Is the welcome mat spiffy? Is the patio tidy? Think about the irresistible qualities of your home, as you first saw them. Are those charming elements as visible today? Lay fresh mulch on the front garden to touch up the landscaping. A coat of paint for the door, window frames, and decorative shutters is well worth the time invested. Just one sunny day’s work…et voilà!

Now, to clean the windows. Are they perfectly clear and inviting? Peek in. Is the interior clutter-free, sparkling clean, and charming? Well done! You’re ready to start your virtual home tour on your social media accounts!

Uplift the Interior Mood

Look for spots where you can lighten up the interior look. White paint over dark panels, doors, or cabinets can make a world of mood-lifting difference.

If possible, remove the furniture, except for your staging pieces, before having the photography done. Make the essence of your home bright and joyful. Consider, for instance, that essential oils can be exceptional mood enhancers. Research has confirmed lavender’s “anti-agitation and antidepressant” effects.

Make this knowledge work for you. Drop a little lavender oil on your AC filter, or on the cardboard roll inside toilet tissue, for diffusion that keeps spreading a calm feeling throughout your home. (You can share the tip with the new homeowner at closing!)

Try Speed Renovating 

Here again, start by taking pictures inside. Find your best touch-up targets. 

For example:

  • Pick out some simple brass outlet covers to replace your old ones.
  • For a mini-makeover in the kitchen, install a sleek, new faucet. It’s a relatively small project. But it can be transformative.
  • Grab some attractive peel-and-stick tiles. Make a backsplash to frame your stove or sink.

Now, throw those curtains open! Open those blinds and windows. Bright, sunny interiors sell homes. 

Ready to Sell Your Home?

Great!

You’ve cleared out everything. The baseboards are painted. Your kitchen is ready with its glistening—and empty—countertops.Be sure the lock and key work nicely. (You might be surprised, but homes get passed over because the agent can’t get the key to work.) Now, you’re ready to open your home, and I’m ready to help you. Just give me a call, and let’s get that SOLD sign ready!

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