Things You Should Know When Buying Bank Foreclosures

1) Location, Location, Location

Location is still everything when it comes to buying a house but think to the future before finding that short sale bargain and beginning a facelift. It can be easy to forget what happened a few short years ago with the onslaught of bank foreclosures when you see the making of a dream home before your eyes.

2) Buy Now, Expand Later

Take a view of the neighborhood and determine what the homes are worth. Homes are many times evaluated by appraisers with surrounding houses. Adding an addition may sound like a good idea at the time but consider the value, or lack of, that will result. By increasing the size of your home, it may bring a great feeling of pride but will not increase its worth if sitting beside smaller, less expensive houses.

3) The Cheapest House in the Block

When buying foreclosures, look for a smaller house in a good neighborhood.If you are intent on turning a house into a home of your own making from a short sale, go for the lowest priced home on the block. This will give you the opportunity to save money, start from scratch and keep overkill from occurring. You will be able to redecorate the interior and exterior in an aesthetic style that fits your personal taste but remain in the ballpark of like values.

4) Budget

Create a budget for remodeling right after purchasing a short sale and do not exceed. A crystal chandelier may look dazzling in the foyer but ask yourself if it is worth spending $2000 as opposed to a hanging light that costs $200. Simplicity is best, especially as we crawl out of the devastation of the housing bust. The future can be shaky for years to come and learning to stay within your means should be a lesson well learned.

5) Remodeling: Pace Yourself

Take the time and think before charging head first into a remodeling project after buying a short sale so you are not left with a loss at the end of the day. If you find a house in a short sale that only allows a couple thousand dollars in renovation, walk away. It will not be worth your time and money to try and stay within the neighborhood overview.

6) Shop Around

There are still many bank foreclosures to select from today. Take your time and think about all the aspects of investing your money into a house. Do not hope that the neighborhood will grow in value but instead, consider what will happen if the surrounding homes fall in price. It is much easier to increase a home’s value than to remove the dollars poured into one.

In Closing:

If you want to purchase a home in a short sale and turn into a home of your dreams for retirement, shop around the neighborhoods that have the appropriate size and location. Look for the smallest and worst house in the area, preferably looking misplaced. This will give you the opportunity to improve a house that may be dragging down the value of surrounding homes and give you the opportunity to improve to your liking.

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