What You Should Know Before Buying a Foreclosure

Who doesn't want to save money when they're ready to buy a house?  A foreclosed house can appear to be an attractive option. There is no doubt that foreclosed homes sell for less, sometimes much less, than homes listed and sold on the open market by real estate agents and owners.

Unless you're a professional real estate investor, it can be difficult to purchase a foreclosed property. Some foreclosed homes have so much damage that the repairs required to make them habitable quickly deplete any savings on their sales prices. Plus, you'll be competing with others who make their living by buying, repairing, and selling foreclosures. 

As you can see, buying a foreclosure can be a huge challenge. Here are some tips you should know before buying a foreclosed home…

Foreclosed Homes Come With Risks

While a foreclosure is a profitable investment, it also comes with the previous owner’s problems. Here are some of the most commonly seen problems:

Financial Risks

Outstanding debts such as back taxes and liens are frequently attached to auction properties. As a result, an otherwise desirable home may be subject to further costs. Before the buying process can begin, any outstanding debts must be satisfied.

This primarily applies to properties that are being auctioned off. Before reselling a property, banks pay off any liens attached to it.

Physical Risks 

Keep in mind when buying a foreclosure that the risk may greatly exceed the potential reward.

If the home is still being occupied, it may be poorly maintained. If the people can’t make the payments, they could well be falling behind on maintenance and repairs.

Some people facing foreclosure are enraged, and they may take out their frustrations on their home before the bank repossesses it. This could mean taking appliances, light fixtures, and any other valuable pieces of the home upon departing.

Another thing to consider is if you buy a foreclosure at an auction, you won’t get the opportunity to inspect the inside, and you are buying the home sight unseen. 

Foreclosures Attract Competition

When dealing with desirable foreclosed properties, increased interest and competition is unavoidable, not only from potential occupants but also from investors and professional house flippers. Foreclosed homes priced competitively can attract many offers quickly, resulting in a bidding war, which can turn a bargain into a costly investment.

Purchases of foreclosed homes quite often fall through, so you could potentially see your desired property appear back in the inventory if you check periodically.

Foreclosure Purchases Can Be a Long Process

The closing of a foreclosure typically requires additional documents to be completed. On top of that, response times between the bank and other parties involved with real estate-owned properties can be pretty slow. You may have to wait longer than you’d like after putting in a bid on a property as well, especially if the bank is processing many other requests.

If you intend to finance the purchase, you should get a mortgage pre-approval. It is likely to quicken the process.

In Conclusion

Foreclosed homes can appear very appealing on the surface. However, costs can be highly unpredictable, and underlying damage may render a property unmarketable. Some people may reconsider buying due to the lengthy process, while others may be turned away by the high demand for attractive foreclosed properties.

Foreclosures can sometimes wind up being incredible deals. With all of this being said, our Realtors at 316 Realty Group are more than willing to assist you in the process. Reach out to us today and let’s get started!


Why Is a Home Inspection Important?

Whether you've purchased five homes or are about to buy your first, a home inspection is almost always recommended. You will actually find that it is one of the most common contract contingencies from home buyers is a home inspection. Continue reading to find out why a home inspection is so important and will benefit you in the purchase of your new home!

Home Inspections Reveal Safety Issues

Having a home inspection completed gives you the opportunity to have your potential home thoroughly investigated. A good and experienced home inspector will always find some issues with a home, even a newly built home. Some findings may not pose a huge threat, but some could potentially be serious and life-threatening issues, like mold or faulty wiring. 

Worn roofs, inoperable windows, and plumbing deficiencies are some common home inspection findings. The end goal of having an inspection performed isn’t to make sure every detail of the home is perfect to your liking, but to discover and take care of any safety issues. 

Home Inspections Can Identify Future Repairs

Buying a home can be a pretty significant investment, and a lot of buyers will be left with what feels like a depleted bank account. This means it’s important to know what lies ahead as far as expenses with your new home. 

Your home inspector could make you aware that the roof is coming close to the end of its life, so it would be a good idea for you as the buyer to keep that in the back of your mind, and possibly start setting some money aside to replace it in the future. This could also be the case for windows, appliances, air conditioning, and many other things. You will appreciate having the heads up instead of being surprised down the road! 

Home Inspections Allow for Negotiations

After a home inspection is completed, you as the buyer will have the opportunity to request repairs from the homeowner, and they will agree or disagree with taking care of the proposed repairs. Keep in mind though that the seller is not obligated to fix anything. 

Without a home inspection, you wouldn’t have the opportunity to request repairs from a seller. You can request the repairs be made, the purchase price be reduced, or give you a cash credit at closing to fix the problems yourself. This is where a home inspection can pay for itself several times over.

In the event that none of these options are available (for example, if the property is bank-owned or is being sold as-is), you can get quotes to fix the issues yourself and create a repair plan in order of importance and affordability.

Final Thoughts

In light of these reasons, it is very important to conduct a home inspection before purchasing a home. While it may cost you a little bit of time and money, in the long run, you'll be glad you did it. Remember no home inspector is perfect and could overlook issues during a home inspection, they will inspect the home in far greater detail than you and your real estate agent did during your initial visit. 

If you're not sure how the home buying and inspection processes work, one of our Realtors here at 316 Realty Group would be delighted to share their expertise and knowledge with you and provide some recommended home inspectors in the area. Reach out to us today!


Housing Market 2022: Should You Wait?

Low inventory, fierce competition, and major price increases have impacted homebuyers since 2020, but quickly rising mortgage rates are making it even more difficult to find an affordable house. Due to the higher rates, many buyers can no longer afford homes in certain price ranges. The issue is that even basic single homes now cost the same as more upscale homes did a few years ago, so purchasers are forced to choose between waiting for additional inventory to come online or moving to a more inexpensive neighborhood. Many others are hoping for a price drop, but that may not happen anytime soon.

But if you're a prospective homeowner waiting for the market to plummet, you may be wasting your time by doing so. 

It’s A Decision Personal to You

An investment in real estate is an extremely personal decision regardless of the market. After all, a home is the most expensive purchase most people will make in their lifetime, so being financially prepared is crucial. It would greatly benefit you as well to speak with a lender and even use a mortgage calculator to find out how much your monthly mortgage payments will be based on your down payment and interest rate.

Trying to time the market or predict what will happen next year is not the greatest way to buy a home. Instead, buy based on your budget and requirements. If you find a home you like in a desirable location that also meets your budget, it may be right for you. However, if you make too many concessions to obtain a home, you may wind up with buyer's remorse and feel burdened. 

Buying in a Hot Housing Market

A hard fact is that you can’t return a house if you realize you overpaid for it or you don’t like it! In this market, buyers tend to make hasty decisions which can inevitably lead to buyer’s remorse. 

Begin with a budget in mind and commit to sticking with it! Despite a minor increase in the number of homes for sale, purchasers are still faced with high prices and mortgage rates at the 6% level. 

Again, you must consider your financial situation when buying a home. Is it financially feasible for you? Experts generally agree that for many people, purchasing and owning a home is a better financial decision than renting. It is never a bad investment if you can afford it. 

Selling in a Hot Housing Market

The first step toward a successful sale is to find a real estate agent who has a vast knowledge of the area and who you know you can trust. The right agent will work closely with you to price your home competitively while addressing questions and offers from prospective buyers.

A hot market will be full of homes being sold “as-is,” and a lot of them will sell as such, but it is still a wise move to make smart and methodical decisions regarding updates and renovations. Some inexpensive moves could be fresh paint, clean staging, and organizing. 

So, to Wait or Not to Wait?

There are thousands of examples out there that point to people who thought the market would come down one day, but it never did, causing them to lose years of equity. In other words, if you're waiting for home prices to significantly decline, you could be waiting for a very long time. 

If you’re ready, our team at 316 Realty Group is more than prepared to assist you in the process of buying or selling, and we can form a game plan just for you. Contact us today and let’s get started!


Common Home Buying Myths: Busted!

Whether you've never bought a home before or are a seasoned homeowner, don't allow these common home purchasing fallacies to keep you from finding the perfect property for you. 

To set your mind at ease, we'll help you sort through some of the most popular home buying myths. 

Myth #1: Looking for a Home is the First Step

At some point or another, we’ve all been guilty of window-shopping for houses online. Some of us may even be guilty of driving to a neighborhood to see a home in person! You’re just looking, you just want to get a feel. But, stop! You are guaranteed to run the risk of setting your heart on the house and only to have it broken.

You could be viewing a home that is in a higher price range than what you are qualified for. Browsing and dreaming can be fun, but when it comes to buying, you need to ensure your credit is in tip-top shape and get pre-approved for a mortgage before you go too far. You need to be aware of what your budget is! 

Myth #2: You Only Pay the Down Payment Up-Front

Only in a dream world! For instance, the seller may determine that you are responsible for closing costs, which can range from 3% to 6% of the purchase price. 

Don't forget the fees, taxes, and other expenses for inspections, and insurance, among other factors.

Myth #3: Home Inspections Aren’t Necessary

Sellers would love for you to neglect this critical step! It implies you'll get the house just as it is, with all of its flaws. And sometimes the flaws aren't immediately apparent.

You may be tempted to skip out on getting an inspection because the market is hot and you’re scared that a buyer who chooses to waive a home inspection could purchase the house before you. Trust us, it is not worth it in the long run! Inspections will save you time and especially money!

Myth #4: You Don’t Need a Real Estate Agent

The internet causes many homeowners to feel empowered these days when it comes to home-buying. You may ask yourself, why do I even need to hire a real estate professional? 

Real estate agents are indispensable in the home-buying process. You will greatly benefit from their knowledge when it comes to the search, negotiating, assistance with legalities, and much more. You will never regret having a real estate agent you trust on your team.

Myth #5: You Must Put 20% Down 

Affordability is usually a significant concern for prospective homebuyers, and this includes determining how much money to save for a down payment on a house. While a 20% down payment may provide certain advantages, such as avoiding Private Mortgage Insurance (PMI) or lowering your monthly mortgage payment, it is not the sole option.

Other down payment amounts, such as 5%, 10%, or 15%, may provide you more choice in determining what property price to strive for and might be a less intimidating amount of money to have saved before closing on your home.

So, Now What?

There are an endless number of myths and misconceptions when it comes to the world of home-buying. Most important of all, make it a priority to find yourself a realtor who you can trust and would like to work with! 

Our real estate professionals with 316 Realty Group encompass the highest degree of integrity, knowledge, and experience, and our goal is to achieve your real estate goals! Contact us today so we can guide you through the home-buying process!


Tips for Finding the Perfect Neighborhood

So many of us have done it. You are browsing through homes for sale online and one catches your eye. You fall in love instantly and immediately begin to envision yourself there. That’s it, this house must be yours!

You arrive to view the home, only to find there are homes around you that look like they’re running a junkyard, the road isn’t as calm and tucked away as you’d like it to be, and there is a lot of through traffic that makes you uncomfortable, especially having little children.

With all of that being said, if you're thinking about buying a home, keep in mind that you're also investing in the neighborhood. You’ll never love your house and want to stay if you don’t also love your neighborhood.

That’s why we’re going to share tips and tricks on how to scope out and be your own detective when it comes to finding the perfect neighborhood for you!

Drive Around & Do Your Homework

One of the most effective ways to get a feel for what a neighborhood is really like is to go drive or walk around it at different times of the day. Take mental notes on what you see while scoping out the area!

Interaction With Neighbors

When walking or driving through a potential neighborhood, it’s important to be aware of any people that approach you and make eye contact with you, which could be a sign of a friendly community. Tools like Realtor.com also showcase which communities have good schools, and more data that reflect a great community and surrounding area.

Observing Surrounding Area

Check for any abandoned buildings or vacant lots, which could be used in the future for commercial development and could definitely impact the feeling in the neighborhood and impact the value of the surrounding properties. Look at the average property taxes for that specific area over a span of several years, and note any fluctuation. You could also dive deeper by contacting local resources like a city hall or Chamber of Commerce to find out about any future plans for the area such as building more homes (if a new development) that may change the feeling of the neighborhood, increase traffic, and in return, increase taxes.

Observe the conditions of the houses, yards, and streets. Look for any signs of vandalism or other deterrents like bars on windows. Especially if you have children, do your research on crime statistics in your neighborhood, whether it’s online (which can be limited,) or by calling the local police department. Lastly, don’t forget to observe traffic speeds too, and the noise level and traffic flow of the street. 

Can it Meet Your Family’s Needs?

When searching for the perfect neighborhood, it is also vital to consider your needs and your family’s. Only you know your and your family’s needs, and you must keep in mind what makes a neighborhood special to you, and what makes it a place you would want to grow and rest in! Questions you could ask yourself are:

  • Are you in pretty close proximity to grocery stores, shops, or restaurants?
  • Is the commute time to your place of work reasonable? (Distance and time both matter! Try doing a test run and seeing how long it would take you at peak times.)
  • Are there any nearby parks or activities for yourself and your children? (Bike paths, hiking trails, playgrounds, state of national parks.)
  • If using a school, is it a reasonable distance from the home? 
  • Are there many trees for shade and coziness, or sidewalks for easy strolls and bike rides? 
  • Is it an older neighborhood with variety and character, or a newer development with a lot more homes and less space and privacy between houses?

Let’s Get Searching!

Our realtors with 316 Realty Group are focused on our client's needs and understand the concern about finding the perfect neighborhood that fits your family. With local insight and knowledge of the area, we are here for you to guide you through the process of searching and finding a home and neighborhood that checks off all of your boxes. Reach out to us today and let’s begin the search together!