March 17, 2011

TOP 7 FORECLOSURE MYTHS for ATLANTA HOME BUYERS & THEIR TRUTHS REVEALED

Posted in Uncategorized tagged , , , , , , , , , , , , at 3:23 pm by winterbaserva

 TOP 7 FORECLOSURE MYTHS for ATLANTA HOME BUYERS & THEIR TRUTHS REVEALED

I am often faced with the same questions and “myths” from home buyers in regards to Atlanta foreclosures. Its quite interesting how far these myths have spread over time and how inaccurate some of them are……I’m going to debunk a few of the common myths that seem to be circulating among consumers.

Myth #1: Foreclosed properties are always in bad neighborhoods.

THE TRUTH: In the current economic climate, every community and every part of town can contain foreclosed properties, with abodes ranging from modest town homes to extravagant vacation escapes appearing on the market. The economy has hit ALL areas and the result is a bunch of Atlanta Foreclosures and Atlanta Short Sales.

Myth #2: Foreclosed properties are usually in poor condition.

THE TRUTH: Though this isn’t always the case, there can be significant maintenance and structural issues hiding behind an attractive and seemingly well-tended façade. Most foreclosed homes show significant cosmetic work (dingy carpets, poor paint, lack of appliances, etc), but the more costly items will tend to be in your roofs, structure/foundation and mechanical systems.

Do your research and use a Atlanta Realtor before purchasing any foreclosed property. They will be able to connect you to the right contractors for proper estimates and be able to establish how much deferred maintenance will affect your bottom line!

Myth #3: A foreclosure sale takes advantage of the owners.

THE TRUTH: At the point of foreclosure, the owner has already defaulted on their loan. Its too late to take advantage of the owners, the property now belongs to the bank who is now the new owner. Had you purchased the property as a short sale (one of the hardest and most misunderstood items in real estate right now), you STILL would have been helping the owner get to a lesser degree of default and in the end helping them.

Don’t feel bad for the owner. While the situation is not ideal and it shouldn’t be wished on anyone. With the proper adjustments and credit repair, people who have gone into foreclosure can buy another home again in about 3-7 years depending on their situation.

Myth #4:Financial irresponsibility is always the source of foreclosure.

THE TRUTH: All it takes is the loss of a job, an unexpected health issue, or other life emergency to put a previously solid financial picture in jeopardy, and coverage of such major expenses as mortgage payments can easily be impacted. There may be some people taking advantage of the time, but that is not the case for everyone. Each Atlanta Foreclosed home has is own unique individual situation.

Myth #5: Foreclosure guarantees bargain pricing.

THE TRUTH: Banks sometimes have up to 15-20 offers on them just because they are labeled the Scarlett Letter “f”. Just because it says foreclosure, looks like a foreclosure doesn’t mean its priced like a foreclosure.

Before falling completely in love with what looks like a can’t-miss deal, be sure you know the property’s true market value so you’re not paying for more house than you’re getting. I have found that in today’s market, Mr. and Mrs. Seller tend to have the ABILITY to budge on their pricing versus the banks whose asset manager has a reserve they HAVE to meet and 15 offers on the table that they get to pick from.

Myth #6: A lower price equals higher equity.

THE TRUTH: This is one equation that won’t pan out if a property involves unpaid taxes, mechanics’ liens or an expensive string of repairs, all of which subtract from the equity and add to the cost. In any foreclosure purchase, BE SURE to get owners title insurance. This will protect you from any encumbrances on title prior to you owning the property. Its a one-time fee that could end up saving you a fortune.

Myth #7: AS-IS Means I have to buy it no matter what.

THE TRUTH: As is means, the property is sold “AS IS” with no repairs made by the seller. HOWEVER, this does NOT mean you are not entitled to an inspection. If you find something on the inspection report that scares the dickens out of you,  the seller will NOT make any repairs, but you are still entitled to back out of the contract during your due diligence window and/or inspection period without penalty. Making sure you have a qualified Atlanta realtor that knows the “ins and outs” of foreclosures is KEY to your success in this purchase.

While this is just a small sampling of some of the common Atlanta Buyer foreclosure myths, there are many others to be weary of…

For MANY other tips, tricks and tactics to WIN in today’s Atlanta Real Estate Market, call me at 678-463-3173 or visit www.SeasonsRealtyGroup.com!

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