Real Estate Professional Network

Foreclosures, Short Sales & HUD Homes For Sale Knoxville, TN byNancy Sartin, REALTOR, Exit Realty Knoxville

A couple of weeks ago, I informed you of my personal thoughts on the subject of foreclosures, short sales and HUD homes.  Today, I want to add to those thoughts and give a few facts verses myths. 

It has been my personal experience that a lot of the people coming to my website are looking for foreclosures, short sales etc. and are looking for a bargain.  I can not begin to tell you how many people I have started taking to these properties and they find that it is more work than they are wanting to do or have the means to do.  There are 203k loans that will allow you to have money to work on the homes, BUT most people are expecting to do the work themselves and a 203k loan REQUIRES a licensed contractor. 

There are still good deals out there that are not foreclosures, etc.  For example recently I closed a deal in Oak Ridge.  The house was listed at about $30,000 below the neighborhood because it did need updating and most of the other homes had been updated.  We made an offer at $40,000 below AND ask to have a HVAC system installed as the house did not have central heat and air.  Not only did the kind hearted seller agree...but he also put in new windows!!

I am currently working a sell in Lenoir City that is very very similar.  The house has not been updated, was already on the market $20,000 below the tax appraisal and we have agreed at $25,000 below.  We are currently negotiating repairs.  Both of these were with private owners that had inherited the property.

At newsday.com I found an article written by Dan Van Benthuysen that addressed myths and realities of foreclosures.  Mr. Benthuysen wrote and I quote:

"Here is a look at some of the myths of foreclosure, according to Danielle Babb, co-author of "Finding Foreclosures" (Entrepreneur Press, $21.95):

MYTH

A bank-owned home is an opportunity to buy a home for pennies on the dollar.

REALITY

Although banks don't want to be landlords, they are under a great deal of scrutiny following the subprime loan debacle, a level of scrutiny that won't permit them to give away homes at bargain prices. Like any other business, a bank wants a good price for the sale of any asset.

MYTH

A foreclosed home for sale in my neighborhood represents a threat to home values in the area.

REALITY

If the bank is trying to get full value for the property, and assuming the area is not overwhelmed with foreclosed homes for sale, the property for sale is not much different from any other kind of sale.

MYTH

The bank is not going to take care of the property.

REALITY

The most common complaint is that grass isn't cut. But that can happen even when the home is occupied by an eccentric or reclusive neighbor. And while it's true that banks are not in a position to do a great deal in the way of maintenance or improvement, the home does represent an opportunity for an investor. If high grass is a problem, call town hall. If it continues to be a problem, take turns with neighbors cutting the front yard. In areas where high foreclosure rates have offered opportunities to squatters and vandals to steal copper piping, neighbors are encouraged to call the police. So far, these extremes have not been problems on Long Island, according to Adam Waldman of Re/Max Best in West Babylon, whose agency handles a number of bank-owned homes among its listings.

MYTH

A foreclosed home offers a quick sale because banks don't want to own homes.

REALITY

Although banks don't want to own homes, most banks were not prepared to have so much inventory on their books, and it's taking them a long time to act, even on offers for the full asking price. Some full-price offers can take three to six months to wend their way through a bank's bureaucracy in search of a decision.

MYTH

You can negotiate a deal with a bank just like any other home purchase.

REALITY

Bank-owned homes almost always carry the telltale phrase "sold as is." That's their way of saying, "Don't think you can negotiate your way to having the deck repaired or the roofing replaced before you go to closing." A private homeowner may be open to such negotiation, but not a bank. The most you can expect is a credit on the sale price that will allow the buyer to spend money repairing the property after the sale.

MYTH

Foreclosed homes offer a great opportunity for first-time buyers.

REALITY

Since foreclosure sales take much longer because of the banks' bureaucracies and backlogs of inventory, and since the prices are at best about 5 percent lower than the rest of the market, a figure more than offset by the work and improvements needed, a great many first-time buyers become quite frustrated trying to buy a foreclosed home. Foreclosed homes are more attractive to investors and handymen who can afford to wait while the bank moves at its own speed. They are attractive to buyers who have no deadline to move in.

If foreclosed homes are not such a great bargain in this depressed market, what is a bargain? Experts like Babb say the best deals are in short sales - sales in which the homeowner is having trouble making payments but not yet in foreclosure. In a short sale, both the bank and the homeowner have agreed to take a negotiated lower price for the sale of the home to avoid foreclosure. Short sales require that the bank be willing to accept less than the amount called for in the mortgage, so this means the bank is a third party to negotiations that in other sales involve only the buyer and seller."

Nancy Sartin is your Knoxville Real Estate Resource for all your realty needs in Knoxville and surrounding areas including Bearden, Cedar Bluff, Clinton, Concord/Bluegrass, Corryton, Farragut, Fort Loudon Lake, Fountain City, Halls, Karns, Louisville, Northshore, Powell, Hardin Valley and all West Knoxville locations. She works with the other agents in the Exit Realty Knoxville office to ensure that her clients are able to find the home that best suits their needs, dreams and goals. In addition to the Knoxville area homes for sale, Nancy also serves the Oak Ridge, Maryville, Friendsville, Alcoa, Loudon, Lenoir City and Madisonville areas. Visit her user friendly website to see all the homes for sale. Finding the home of your dreams is just a phone call away at 865-690-4300 (0ffice) or 865-256-0064 (cell).