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Hall REO Contractors Soar As Burned Foreclosure Buyers Get Wise...


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<% End If%> HALL - Thousands of homebuyers throughout the Greater Atlanta or the North Georgia area are ending up spending far more than they should on foreclosed homes.  In many cases, these homes are being returned to their original lenders in "cash for keys" programs or being foreclosed on again leaving families or investors empty handed. 

Purchasers of foreclosed homes are winding up losing their investments, ending up in bankruptcy courts, moving back in with relatives, living in hotels or worse.  These disheartened individuals and families are asking themselves "What went wrong?" 

At a time when our economy seems to be in a state of recovery, as many are returning to work and many more seem to be getting close to being back on their feet again - why are so many finding themselves back where they were not so long ago?

It turns out that the foreclosure homes they purchased at what looked like incredible discounts at the time - turned out to be not so great a deal today.  Unless these foreclosure homes went through "REO Companies," then the homes never went through a legitimate process of being refurbished or repared the correct way.  These homes were originally built with all builder's grade materials, they were sloppily thrown together in a rush by unskilled, undocumented labor during an overly extended housing boom.  They were then neglected by first time homeowners who never legitimately qualified for their mortgage to begin with.  These homes were then occupied for a couple of more years by abusive, resentful individuals who knew they were soon losing the home through foreclosure.  The houses then sat empty for a year or two more, waiting to be off loaded onto unsuspecting homebuyers looking for a good deal on a foreclosure property. 

When the foreclosure purchasers bought them, the houses were only discounted from their original sales price which only covered the recent devaluation in real estate values.  In fact, the houses continue to dive in value by significant amounts and are expected do so for quite some time.  The extremely costly repairs were never performed which are vital to the home's habitability and the new home buyers are finding that out the hard way.

Included in these deficiencies are roofs that need to be replaced, mold issues, defective siding and window issues, worn out or missing HVAC units, pest infestations, diving neighborhood conditions and many more conditions.  The costs of these repairs more often than not far exceed a total price of over $50,000.  Adding insult to injury are the facts that most of these problems must be remedied immediately before the property is occupied, plus the fact that these problems were NEVER budgeted in the buyers' purchase price of the house..

So, what exactly did go wrong and how can it be prevented?  The answer is quite simple and extremely safe as well.  If those seeking great savings in their purchasing of a home by targeting foreclosures, these buyers simply need to learn as much as they can about the "REO" companies in their desired area and select their next purchase from homes that have been inspected, repaired, and documented by an well established REO company with a solid reputation.

It's important to keep in mind that ANY company can claim to be an REO company and anyone selling a property can claim that a house has been inspected and repaired by an REO company - but that's simply not good enough.  Home buyers MUST do their homework in finding an REO company they can trust, and internet search engines are a great place to start.    It's vitally important for those looking to buy a home to select ONLY homes that have been repaired or renovated correctly by reputable REO companies.  Homebuyers may try to request something from the REO company stating that the home is in decent working condition.  It's not imperative that the REO company provide a warranty or extended warranty.  A simple written statement on their company letterhead that the home is in working condition.  In fact, having they REO company do a professional written inspection on the property might be the safest way to go.  You have to have the home inspected anyway, so why not have the company that made the repairs do the inspection.  Imagine the recouse leverage that will exist at that point.

In short, if home buyers would have purchased only through reputable REO companies - these home buyers would not be in the trouble they're in today!

 

Foreclosures - Very Often the Last Place To Find a Good Deal on Foreclosures
ATLANTA - To the untrained eye, a foreclosure home discounted as much as 50% from its original sale price several years back may very often be the last place a family should be looking to make their most important long term investment.

That's not to say that all foreclosure homes are a bad idea.  The most important lesson to take away from this article is that when considering purchasing a foreclosure property - there is a great deal of research to be done before an informed decision can be made - and this story has been written to help guide future home buyers around the pitfalls many have made by basing their decision to buy on the simple fact that the foreclosure property once sold for a great deal more than the currently advertised price.  That apparent enormous savings is almost always little more than an illusion and almost never the "cash in the bank" we all would love for it to be.

If a family is considering the purchase of a home and think they can come out greatly ahead by purchasing a foreclosure home that has been greatly reduced from its original sale price - this is where the research begins - and not the time to start celebrating.

The most important thing to find out first is whether or not the lender that foreclosed on the property used a professional "REO" company or simply sold the home to some part time investors that tried to get the most they could out of a couple of gallons of paint and some very talented landscape artists with a superb gift for enhancing curb appeal.

These "house flippers" are under absolutely no obligation to disclose dangerous conditions to future buyers of these homes and are professionals at cheaply covering up costly repairs that have to be made to the home in the very near future.  Don't think the inspector you're paying $99 will be bending over backwards for you either.  They may have great credentials and insurance but they will provide you with absolutely no relief years down the road when the unthinkable occurs.  The mouse type on the back of their $99 contract relieves them of any liability you may think accompanied their one hour inspection.

In fact, when a family is looking to purchase a home and wants to consider taking advantage of significant savings made available from unfortunate events in the housing or job market - the absolute best way to safely go about doing so is by searching through the inventory of local REO companies directly.  They can be easily found by looking through you local search engine directly and usually not by contacting your local realtor and asking them. You'll sometimes even find positive articles in local newspapers about some of the more reputible, well established REO firms.

Professional "REO" companies are qualified firms, usually local, that work for the banks or lending institutions themselves.  They perform a very thorough home inspection and make repairs the correct way.  Mold or termite problems are remediated the correctly and responsibly.  Structural problems are addressed in a manner that assure the future homes'occupants that the roof will not soon cave in or the house will not soon collapse because repairs were done by licensed contractors in accordance with state and local building codes and not simply by covering up problems with colorful new paint or carpeting.  After all, these REO firms work for the banks or lending institutions who will ultimately held responsible should the repairs be deemed faulty or deceptive.  And let's face it - these banks and these REO companies plan to be here next week, next year and so on.  Who knows where those house flippers ran off to after exploiting the market place for all they could.

Related Story:

Tips for Buying Distressed or Foreclosed Homes

Buyers Of Foreclosures In Atlanta, North Georgia Need To Check For These Common  Problems Before Purchasing:
Atlanta foreclosures may look like a bargainbut that’s not necessarily the case. If you are thinking of purchasing an Atlanta home foreclosure, here is a list of five things you should look for in your search.

To many unknowledgeable home buyers and investors, the Atlanta bank foreclosures may seem like a steal. Sure, they may be “fixer-uppers” but they are selling for thousands of dollars below other homes in the neighborhood. Brion Grant, past president of the American Society of Home Inspectors, in a recent interview stated some of these foreclosed homes may conceal some rather unpleasant surprises from leaky pipes in the walls to wild animals taking up refuge in the attic.

Remember, foreclosed homes in Atlanta are sold “as is!”
Here are the five most common problems home inspectors find in foreclosed homes Atlanta area wide.

MOLD

These microscopic organisms thrive on moisture. In muggy Southern climates, mold can inhabit any home. But in a vacant, uncared for home, it can spread like wildfire. In some cases, a slow drip of water inside a wall can cause a massive mold infestation and damage will be unseen by the untrained eye. That’s why home inspectors are so careful to check for leaks, small holes and possible water seepage. In Atlanta foreclosures, mold is the number one issue.

VANDALISM & BREAK-INS

A vacant foreclosure in Atlanta, GA is an invitation for vandals to help themselves to things such as air conditioner units, appliances, even faucets and light fixtures. Copper piping and electrical wiring are desirable commodities. Anything that can be resold is up for grabs.

Property damage is often visible.

Sometimes the previous homeowner has destroyed the home in anger and frustration. Other times, neighborhood kids will have smashed in windows or used the home for parties. Most Atlanta foreclosures have had their utilities shut off, thus the alarm system is inoperable. Vagrants will take up residence to get out of the weather.

A rarity is the homeowner who has left the home in pristine condition, even vacuuming the floors on their way out. If an Atlanta bank foreclosure stays on the market long, more than likely it won’t remain that way.

PARTING GIFTS

Homeowners going through foreclosure are strapped for cash. Often times, they have removed anything of value. Any upgrades added to the property will now be gone. In many cases, so will appliances, ceiling fans, window dressings, even laminate wood or tile flooring and sound systems have been known to disappear before the key is handed over to the bank. The mentality of the person being foreclosed on is that they paid for them, why should they leave it all for someone else?

Home inspectors report toilets, spa tubs and kitchen cabinets have been ripped out of Atlanta foreclosures. The former owner may also leave behind trash and junk they didn’t want. Beat up furniture, rusty grills, car parts, and smelly garbage in the pantry can greet the first potential buyer or inspector. The new buyer will have to pick up the costs of removal and replacement.

WILD ANIMALS

Vagrants are not the only ones who seek shelter. A home void of human smells and sounds can be a beacon to snakes, raccoons, rats and even large mammals such as panthers, wild boars or feral cats. The American Society of Home Inspectors have heard every horror story imaginable. It is quite normal to find hives of bees or swarms of bats in the attic. Skunks can inhabit the ventilation system and squirrels the air ducts.

Insects infestation is the most common. Fleas nestle in the carpet in such great numbers that they can turn your legs black when you walk across the room. Fire ants and termites may be rampant. Cockroaches may have taken over in the kitchen and bath looking for water sources. Moths can eat any drapes, carpeting, or even wall paper.

NEGLECTED MAINTENANCE

If a home owner is struggling to make their monthly mortgage payments they are not likely to shell out money on HVAC maintenance, or roof repair or replacement. More often than not, repairs of any type stopped months before the payments did. Even simple things such as changing HVAC filters go by the wayside. Gutters have not been cleaned and debris has not been cleared off the roof. It is possible such neglect will mean thousands of dollars in needed repairs.

It is possible the lending institution has already made some clean-up and repairs, but many do not have the time or the crew to do so. The Atlanta home foreclosure market is growing steadily and banks may have dozens foreclosures on their hands. The best option for the potential metro Atlanta foreclosure buyer is to invest in a professional home inspector who will thoroughly examine every nook and cranny of the home. A professional home inspection  may not eliminate every surprise, but it can give the Atlanta home foreclosure buyer a better idea of how much money they will need to set aside for repairs and clean-up.

The key to determining whether the foreclosure in Atlanta, GA your considering purchasing is a “money pit” or a “real steal” is a quality home inspection.
A certified home inspector with lots of experience will be able to spot the problem areas that can cost big bucks to repair.  The certified inspectors at Southern Home Inspection Services have protected over 29,789 home buyers over the last 13 years and they can protect you as well!

Don’t settle for a cheap inspector when buying a foreclosure in Atlanta, GA or your biggest purchase could turn into your worst nightmare.

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