|
| More rates and news from Foreclosed Homes For Under $1,000(Everyone knows that the increase in foreclosures that we are seeing and will most likely continue to see, will bring about a lot of bargains for investors and regular home buyers alike. )
If you are looking to buy in an area that is experiencing some difficult times right now due to a bad job market, or some other factor, you are likely to see homes selling at auctions for prices that seem like a complete joke.
That is because some areas like Pittsburgh and Detroit have homes selling in some of their toughest neighborhoods for dirt cheap prices at auctions, simply because no one is even remotely interested.
A December 2, 2006 article by James R. Hagerty of The Wall Street Journal, “You can buy a house for $1,000 today, but you’ll pay the price,” discusses how the cheap price of these homes will cost you in the amount of work you have to do to it to make it livable.
“Nationwide, about 3,800 foreclosed homes sold for $1,000 or less in the first 10 months of this year, according to First American Real Estate Solutions, a data provider in Santa Ana, Calif.”
“Sales like these tend to occur in places like Detroit, Cleveland and Pittsburgh, where dying industry has left behind a surplus of what once was middle-class housing in neighborhoods now known for crime and bad schools.”
The amount of homes that lenders and banks are looking to unload at extremely cheap prices seems to be growing as homeowners continue to fall into some tough times, and can no longer keep up with their mortgage payment.
“More distressed homes are headed for the block. As the national housing boom fades, foreclosures are rising on subprime loans, those for people with weak credit records. A recent report from mortgage analysts at UBS AG in New York found that about 2% of subprime loans packaged into securities this year were in foreclosure by October, nearly double the year-earlier rate.”
But potential buyers looking to get in on a tremendous bargain should also know what they are up against. Most of these homes that are selling for $500 or $1,000 are barely livable and need a lot of work to get it to where someone could even stay the night.
But if you are prepared to do all of the renovations and remodeling that most of these ultra-cheap homes will require, than you could find that going this route is a great way to start to build wealth through real estate investments.
Obviously, buying foreclosed homes at auctions (especially the ones discussed in this article) is not recommended for inexperienced buyers, and should be left to experienced real estate investors.
“Foreclosed homes generally aren't a huge bargain. Savvy local investors know their value and compete to buy them. Still, as Monte Lowderman, an auctioneer in Pittsburgh noted, there is always the chance that one investor will spot potential where other bidders don't see any. And as lenders find themselves owning more foreclosed property, they become more eager to unload it as quickly as possible. The longer lenders hold these homes, the more they pay in taxes, insurance, lawn care and other maintenance.”
The bottom line here is that if you are looking to buy a house for less than the cost of a new suit, just be prepared to pay the price in renovations and fixing it up.
|
