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Foreclosures – three things your Realtor won’t tell you

In these times with a market full of foreclosures it seems that the “Best Deal” out there is to purchase a distressed property for “pennies on the dollar”.  It seems too good to be true and when you really think about it, it may be…  Why is it that when you get a list of foreclosures from your local Real Estate Sales Office you never see the pristine, immaculate, almost new homes we all hear about so often?  No, the ones you see are the homes we used to call “handyman specials”.  Homes that need repair or houses with roof leaks, damaged walls, broken irrigation systems and dead lawns

Your Realtor won’t tell you:

The Good Foreclosure properties were taken by Wealthy Investors with connections to the banks, real estate community and other involved third parties before they ever became available to the general public.  That explains why Those AMAZING properties you hear about, are never on the list at the Real Estate office.  They were bought with CASH before the list was ever released.  The banks happy, the Realtor is happy and the investor can turn on the utilities and re-list the property with a great markup.  Lets’ face it, if you made your living selling Real Estate; knew of a wealthy investor who was looking for good properties; knew they would close within days (meaning you would get paid within days as well) and knew they might buy multiple properties from you;  wouldn’t you let them know about every good property before you spent your money advertising the property and  publishing the list?

The fact that the property made it on the list means there was enough wrong with the property that EVERY connected investor has passed on the home. These people are professionals. They know what they are doing, there is a reason they passed on the home and the house made it to the list.  Can you see why it is has been passed over by everyone that has seen it?  Do you have the cash to put into the home to make it livable again?  Do you have the knowledge to know what will fail next?  Do you have the knowledge to know if the price you are quoted for the needed repairs is a good price?

Whatever savings you have now, will likely be lost at re-sale when the new buyer learns through the title search that the house was in foreclosure during The Great Recession.  Think about it, five to ten years from now, would you pay as much for a previously foreclosed home as one where foreclosure never happened?   Do you pay as much for a used car that has been in an accident?  Isn’t that why places like CarFax exist?

Purchasing a home is a big investment any way you look at it.  Many times the best investments don’t have the hype or attention of the mediaNew Home prices are at historic lows.  The new homes built today don’t have Chinese Drywall in them.  They don’t have a chain of Title that includes Robo Signers from the Banks and they come with Warranties, Real Warranties by the builder and the manufacturers of the products in the home.  Now which do you say is the safer investment?

About Tom Greenawalt

Tom is a Licensed Builder in the State of Florida. He has been in the construction industry for 35 years building new homes in Pittsburgh, Washington DC, and Chicago before moving to Central Florida. The majority of Tom's career has on detached housing for entry level and first time move up buyers. He was with Maronda Homes for over 15 years.

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